FTX recovers $7.3 billion in assets amid plans to restart the exchange

FTX, a cryptocurrency exchange that filed for bankruptcy in November last year, has announced a recovery of more than $7.3 billion worth of cash and liquid crypto assets. The assets recovered by the exchange have increased by over $800 million since January this year, according to the exchange’s attorney.

FTX recovers $7.3 billion in assets

FTX’s attorney, Andy Dietderich, addressed a bankruptcy court hearing in Delaware, saying the company was exploring its future plans. The FTX exchange and its bankruptcy estate have spent months gathering resources and identifying the issues that might have triggered the liquidity crunch that led to bankruptcy.

The founder and the former CEO of FTX, Sam Bankman-Fried, has since been indicted on multiple counts because of the exchange’s failure. Bankman-Fried has pled not guilty to the charges filed against him. According to Dietderich, the situation at the situation has since been stabilized.

FTX has benefited from the recent recovery across the cryptocurrency market. The total recovery by the company was valued at $6.2 billion, going by the crypto prices in November 2022 when the exchange filed for bankruptcy.

The new FTX CEO, John Ray, who is also overseeing the bankruptcy proceedings, has provided comprehensive details into the illegal fund transfers and poor accounting at the exchange. Ray has previously said that the situation at FTX demonstrated a complete failure of corporate controls.

Plans to restart the FTX exchange

FTX is currently holding talks with stakeholders and exploring relaunching the exchange. Dietderich said that a decision on the matter would be made in the current quarter. He has also shared minimal details about a reboot and what it could mean for FTX customers that had their funds locked up in the exchange during the bankruptcy proceedings.

FTX clients in Japan have already been able to withdraw the funds locked up on their platforms because of the strict crypto regulatory framework in the country. FTX will need ample capital to reboot the exchange because the funds that have been recovered were not previously moved using the existing customer interface.

FTX has not said whether it plans to use the funds recovered to restart the exchange or to repay customers. If the exchange is to be restarted, it will need external funding or the sale of assets belonging to the exchange. Dietderich noted that the exchange was currently working on a preliminary Chapter 11 plan to give the exchange an exit from bankruptcy.

FTX plans to file the preliminary Chapter 11 plan by July. The exchange has also acknowledged that most details still needed to be figured out as creditors battle over their share of company assets. The FTX exchange does not expect that this plan will be approved before the end of Q2 2024.

Bankman-Fried, alongside other former executives at FTX, are facing fraud charges for their contribution toward the collapse of the exchange. Some former executives have already pled guilty to the charges and are working with prosecutors.