FTX returns: the crypto exchange recovers $7.3 billion and plans to restart

True or not, this news may pique the interest of many, especially since FTX has recovered about $7 billion to compensate and restart.
FTX returns

True or not, this news may pique the interest of many, especially since FTX has recovered about $7 billion to compensate and restart.

The news comes at one of the most reassuring times for the crypto sector. First, we are facing a steady recovery in the sector, after Bitcoin surpassed $30,000 and Ethereum $2,000, despite bearish pressures that intimidated traders.

Second, since 2023 we have had a regulators’ focus turned heavily to regulation and crypto service providers, which makes the whole industry safer for users.

Indeed, remember that cryptocurrency is a risky market and there is no denying that. So to have news like that from FTX leaves one a bit surprised. But how will traders react? How will it regain investor confidence?

FTX recovers $7 billion

Surprisingly, it seems that the company has managed to recover a very large sum. It seems that these days the news has gone around the world!

The bankrupt cryptocurrency exchange FTX has recovered more than US$7.3 billion, including cash and crypto assets, an increase of more than US$800 million since January.

That’s what the company’s lawyer said Wednesday during a U.S. Bankruptcy Court hearing in Delaware.

The lawyer, Andy Dietderich, said the company is beginning to think about its future after months of efforts devoted to raising resources and understanding what went wrong under the leadership of indicted former founder Sam Bankman-Fried, who, we recall, has pleaded not guilty.

Where are the funds?

The company’s legal team continues to work to accurately recreate the crypto provider’s internal account records, and external estimates from the U.S. Commodity Futures Trading Commission speak of missing funds of more than $8 billion.

In short, not too far off! Considering also that the widespread rise in cryptocurrencies in recent weeks has helped the company, bringing just since Bitcoin reached $30,000, more than $1 billion into the exchange’s pockets.

Other FTX funds are still stuck in the Bahamas, where the country’s own securities commission has seized assets following the bankruptcy.

The ensuing jurisdiction dispute between the U.S. legal team and Bahamian regulators has yet to be resolved, but expect flips in the short term.

FTX plans to return?

Media speculation travels fast, there is no getting around it. There has long been talk in communities and news outlets about a possible return of FTX to full operation. However, things are not that simple.

Raising $7.3 billion still does not allow the exchange to become active again, and the debate remains open as to where the funds raised should go: return capital to people rejected by the company or go back to work?

A difficult decision for FTX’s new leadership to make. Moreover, it would be more obvious to expect compensation from customers who suffered a loss from the bankruptcy. Rather than a restart of the company, which, in any case, would seem to need outside intervention or a sale.

But what about FTX customers?

This is a question that is not properly answered. Successfully emerging from bankruptcy does not necessarily require FTX to return customer funds, in fact.

Other previous cryptocurrency bankruptcy rulings have freed companies from that obligation. However, FTX must repay numerous debts to creditors (including Margaritaville and Doordash). And to do so, the company will likely need even more capital than it currently has. In addition, there are many customers who have not yet been compensated by the company. And who still fear for their capital that has never been repaid.

Meanwhile, Sam Bankman-Fried, the exchange’s fallen co-founder and former CEO, is still awaiting trial on 13 charges of fraud, conspiracy, and campaign finance. To all of which he has pleaded “not guilty,” while also seeking compensation for legal fees after news of recovery of at least $800 million more from January 2023.

Other former company executives Nishad Singh, Caroline Ellison, and Gary Wang were also indicted for fraud, but pleaded guilty.

New report on FTX bankruptcy

Latest news then concerns some findings made by the team in charge of the FTX matter. It seems that an initial report has been made since the November 2022 disaster. And delays have been noted involving the company’s governance, accounting, security, and financial management.

After processing conversations among 19 FTX members, terabytes of data, and millions of documents, initial fears have been confirmed. Namely, mismanagement of capital, operations, and risk led the exchange to bankruptcy. Will this report help the victims to be compensated?

Read also: Genesis, imminent bankruptcy? SEC reports sale of unregistered securities

Related articles...
Latest news
What are AI Phones and how they work
Energy saving at home: useful tips to pay less on your bill
China begins military maneuvers around Taiwan three days after pro-independence president Lai took office
Airbag certificates: what they are and how they work
Esplora puts human value at the heart of the trade fair set-up sector
The smartphone of the future will unlock with your breath: here is how


Sign up now to stay updated on all business topics.