Collapsed crypto exchange FTX has recovered more than $7.3 billion in cash and liquid crypto assets during its bankruptcy process, FTX’s legal team said in a bankruptcy court hearing Wednesday.
"The situation has stabilized, and the dumpster fire is out," attorney Andy Dietderich told the court, according to a Reuters report.
However, the exchange is still "far away from an equity distribution," he said.
Dietderich also told the court Wednesday that there was a possibility that FTX could reopen in the future, a plan that would require raising significant capital.
If the company decides to start anew, they would have to decide if that capital would come from FTX’s estate or a third party, Dietderich said.
"There are possibilities that customers could have an option to take part of their proceeds that they would otherwise receive in cash from the estate and receive some kind of an interest in the exchange going forward," Dietderich told the court.
Restarting the exchange, however, is one of many possibilities, Dietderich said. There are “as many opinions on this…as there are professionals involved in this case," Dietderich said. "And that's a lot."
FTT, FTX’s native token, saw a sharp increase in price following Wednesday’s bankruptcy hearing from $1.32 to $2.70. As of 10:45 a.m. Friday, the price had dropped to $2.02.
A similar price jump occurred in January when current CEO John Ray, who took over in November, said that he was considering restarting FTX’s international arm eventually. FTT rose to $2.37 at the time.
Current numbers, however, are dwarfed by FTT’s all-time high of $79.53.
Ari Paul, founder of BlockTower Capital, opined on Twitter that the FTT token is “extremely unlikely to have any relation to FTX ever again” and that the tokens were likely just “collectibles” now.
FTT will likely have no place in FTX’s reincarnation, Paul said, because the token “had no legal status relative to FTX” and because it’s “likely illegal.”
The exchange is working on a Chapter 11 plan that would lead it out of bankruptcy, and intends to file the plan by July, Dietderich said in court Wednesday. The company doesn’t expect any plan to be approved prior to the second quarter of 2024.
