Crypto exchange FTX’s native token FTT experienced a massive surge of over 100% on April 12 after lawyers revealed that they had recovered additional liquid assets from the defunct exchange. During the latest bankruptcy hearing, Sullivan & Cromwell lawyers announced that they had recovered $7.3 billion in liquid assets from the exchange, a significant increase from January’s $1.9 billion tally. This news has caused FTT to soar in value, with the token trading at $2.468 as of press time.
FTX is currently navigating bankruptcy, and the lawyers also announced during the hearing that the company is considering reopening the exchange at some point in the future. One potential option discussed was to let FTX’s creditors convert a portion of their holdings to a stake in a reopened exchange.
The lead attorney for FTX, Andy Dietderich, told the court that restarting the exchange was one of many potential options being considered for the future of the company. If this path is taken, significant capital would need to be raised, and there is internal debate over whether that capital should come from the FTX estate’s capital or third-party capital.
Dietderich also mentioned the possibility 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 interest in the exchange going forward. However, the attorney emphasized that the possibility of restarting FTX is one of many, and any decisions are far from final.
FTX Europe AG Files Petition for a Swiss Moratorium Proceeding
FTX Trading Ltd. and its affiliated debtors also announced that the Board of Directors of debtor FTX Europe AG has filed a petition for a Swiss moratorium proceeding. A Swiss court granted the Moratorium on April 11, 2023. FTX Europe AG notes that the Moratorium process will facilitate the exploration of strategic alternatives, including the potential sale of its business pursuant to U.S. Bankruptcy Court-approved bidding procedures.
In its order granting the Moratorium, the Swiss court appointed an administrator for FTX Europe AG. FTX Europe AG is also a debtor in the Chapter 11 proceedings in Delaware. However, the previously announced process for confirming customer balances in preparation for allowing the withdrawal of funds from FTX EU Ltd. remains unchanged by the Moratorium.
Overall, FTX’s potential reopening has generated excitement in the cryptocurrency world, with FTT’s value surging as a result. However, the company’s future remains uncertain, and any decisions about reopening the exchange will depend on various factors, including the availability of capital and the opinions of professionals involved in the case.
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