FTX’s debtors announced at a hearing on April 12 that the restructuring team has recovered $7.3 billion in liquid assets. According to an attorney representing the defunct cryptocurrency exchange, the exchange is now considering a fresh start. Following the announcement, the exchange’s token, FTT, rose more than 70%, from $1.30 to $2.35 per unit.
Lawyers say FTX is considering a reboot
Attorneys representing FTX debtors recently told a U.S. bankruptcy judge that they are discussing the possibility of a fresh start for the exchange. Andrew Dieterich of Sullivan&Cromwell stated that various opinions are being deliberated on the matter. The law firm is investigating tax implications and “long-term options.” In addition, the restructuring teamfoundWith $7.3 billion in liquid assets, Chief Restructuring Officer John J. Ray III and his team released a43-page interim report.
The report outlines several management failures in the areas of finance and accounting, digital asset management, and management and governance. In particular, “a handful of employees, among others, had virtually unlimited authority to direct the transfer of fiat and crypto assets and to hire and fire employees, and there was no effective oversight or control that served as a check on how that authority was exercised.” The report also noted that the FTX failed to implement basic and widely accepted security controls to protect cryptocurrency assets.
During the information search, FTX debtors had to scrutinize Quickbooks records, senior staff laptops, and Slack conversations. The report noted that certain entities in the FTX group used Quickbooks as a general ledger. It also noted that FTX executives “mixed and misused corporate and customer funds” and “lied to third parties.” The idea of rebooting the exchange was first mentioned in January when Ray confirmed that he was open to the possibility of reviving FTX.
After news of a possible relaunch was made public, FTX’s crypto token,the FTThas risen 70% against the U.S. dollar, from $1.30 pre-trial to $2.44 today. Manyof the FTTwere illegally released from the FTT’s main deployer address last year. Bankrupt exchanges hold FTTs, but they are highly integrated, with thetop 10 walletsholding 94.19% of the circulating supply.
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