FTX’s lead attorney said that restarting the exchange would require significant capital and there was an internal debate about whether this money should come from FTX’s estate capital or through third-party capital.
The legal team behind the debtors of the bankrupt crypto exchange FTX recently suggested that the exchange could consider a reopening by mid-2023 which has a positive impact on FTT price. FTX’s attorneys from Sullivan & Cromwell made the announcement during a court hearing on Wednesday, April 12.
The lawyers further added that ever since FTX announced bankruptcy, the crypto firm has recovered nearly $7.3 billion in liquid assets. Also, the March filing from the debtors has noted that the four FTX company silos had a total of $4.8 billion in scheduled assets.
As per the legal team, crypto exchange FTX might reconsider the option to restart its crypto exchange operations by the second quarter of 2024. Earlier this year in January, FTX’s new chief executive officer John Ray stated that he is working to revive the exchange once again.
During the recent discussion, the FTX legal team also considered an option to allow FTX’s creditors to convert a portion of their holdings to a stake in a reopened exchange.
However, yesterday’s news of reopening was enough to drive the price of FTX’s native FTT tokens higher. Just as lawyers announced the potential reboot plan, the price of FTT tokens surged from $1.32 to $2.80, surging by more than 112% in a short time period. As of the press time, the FTX token (FTT) is trading at a price of $2.53 with a market cap of over $830 million.
However, the FTT token is still trading at a 90% discount from its pre-bankruptcy levels.
Lead Attorney on Restarting FTX
During yesterday’s hearing at the court, Andy Dietderich, the lead attorney for FTX said that restarting the exchange was one of many potential options that the exchange was considering. “There are as many opinions on this, I think, as there are professionals involved in this case,” Dietderich said.
Dietderich added that restarting the exchange would also require them to raise a significant amount of capital. Also, there was an internal debate about whether this money should come from FTX’s estate capital or through third-party capital. FTX’s lead attorney added:
“There are possibilities 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 an interest in the exchange going forward”.
On the other hand, the bankruptcy judge denied a motion that would prioritize reimbursing former FTX CEO Sam “SBF” Bankman-Fried’s legal fees. Judge John Dorsey said:
“Frankly, I have zero evidence to establish cause here. Mr. Bankman-Fried did not put out any evidence whatsoever as to the balancing of the equities here, what harm is going to occur to him. I don’t know what other insurance policies he has access to, I don’t know what other assets he has access to privately that would allow him to cover these costs and then recover them later under this policy.”
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