Key facts:
- FTX creditors are being studied to invest in shares if the exchange reopens.
- A former FTX executive also supports the idea of reopening the exchange.
The bitcoin (BTC) and cryptocurrency exchange FTX could reopen and operate again after more than $7 billion was recovered from the bankrupt platform, according to the company’s defense attorney.
As CoinDesk reports, the lawyer for FTX, which is part of the Sullivan & Cromwell law firm, testified at a hearing today, April 12, 2023. He asserted that the exchange is considering opening “at some point in the future” and while it is coping with bankruptcy.
One option discussed was for FTX creditors to be able to convert part of their holdings into a stake (or share) of the reopened exchange, according to the jurist.
For his part, the lawyer notified that they had managed to recover USD 7.3 billion in liquid assets from the disgraced centralized exchange, in addition to the USD 1.9 billion that was reported last January. Despite the sum, FTX’s lawyer said the company is still a long way from being able to start a program to give back funds.
What the lawyer said is consistent with advice given by former FTX head of sales, Zane Tackett. He said FTX should reopen because it would provide “some value to creditors.”
Due to the possible reopening of FTX operations, the platform’s native token, FTT, rose 50% in price in a few minutes, according to the figures shown by CoinMarketCap.
At the close of this report, the token is trading in the order of USD 2.06, as shown in the graph below.FTX’s native token is up 50%, according to CoinMarketCap. Source: CoinMarketCap.
FTX is under the direction of a bankruptcy board, led by attorney John J. Ray III. He took over the reins of the company in November 2022, when former CEO Sam Bankman-Fried filed for bankruptcy and stepped down.
Bankman-Fried was criminally charged in the United States for the alleged crimes that would have caused the collapse of FTX, including some related to fraud and money laundering. He was detained in the Bahamas in November and taken to the United States where he faced a first oral trial.
In it, he pleaded not guilty and posted bail to get out of jail. Now, the businessman is in custody in Palo Alto, California, at his parents’ house. The other members of the old management were released from prison after having paid bail and collaborating with the US justice system, as reported by Market Times.
