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FTX Reportedly Considering Bids to Restart Exchange, Decision Expected by Year End
During a court hearing held in Wilmington, Delaware, Kevin M. Cofsky, the investment banker representing FTX from Perella Weinberg Partners, disclosed the company’s intentions to reach a decision regarding these proposals by the end of the year
The potential avenues for FTX’s revival are under consideration, and several options are on the table.
FTX Considers Different Scenarios to Revive Exchange
One scenario involves selling the entire cryptocurrency exchange, which, during its prime, boasted a customer base of more than 9 million users
Alternatively, FTX could choose to collaborate with an external partner, possibly a strategic investor, to reboot its operations
In the third option, FTX could embark on an independent journey to revive its exchange, albeit without its previous CEO.
Sam Bankman-Fried, FTX’s former CEO, who had resigned from his position last year amidst financial turmoil, is currently embroiled in a legal battle
He faces seven federal fraud counts related to the alleged diversion of FTX customer funds into Alameda Research for high-risk trading, political contributions, and extravagant property acquisitions. These actions eventually led to the downfall of both entities.
Glimmer of Hope for FTX Creditors
As these deliberations unfold, there is a glimmer of hope for FTX’s creditors. The quest to raise funds for creditor repayment has been relentless since FTX filed for bankruptcy last year
Court documents reveal that FTX’s administrators have managed to recover approximately $7 billion in assets, with a significant portion, approximately $3.4 billion, in the form of cryptocurrencies.
Since then, significant progress has been made in recent negotiations between major creditor groups. Tentative settlements have been reached on crucial disputes, potentially paving the way for the filing of a comprehensive payout plan in December, according to company attorney Andrew Dietderich.