FTX debtors disclosed during a hearing on April 12 that the restructuring team has raised $7.3 billion in liquid assets. The exchange is currently considering a relaunch, according to a lawyer representing the defunct cryptocurrency exchange. Following the announcement, the exchange’s token, FTT, increased by more than 70%, from $1.30 to $2.35 per unit.
Lawyers say FTX is considering a restart
Lawyers representing FTX debtors recently told the US bankruptcy judge that they had been discussing the possibility of relaunching the exchange. Andrew Dietderich of Sullivan & Cromwell said several opinions are being discussed on the matter. The law firm has been looking into tax implications and “long-term options.” In addition, the restructuring team has discovered $7.3 billion in liquid assets, and chief restructuring officer John J. Ray III and his team have released a 43 page interim report.
The report outlines various control failures in the areas of finance and accounting, digital asset management, and management and governance. In particular, “a handful of employees had, between them, virtually unlimited power to direct transfers of fiat currency and crypto assets and to hire and fire employees, with no effective oversight or controls to act as checks on how they exercised those powers.” The report also notes that FTX failed to implement basic and widely accepted security controls to protect cryptocurrency assets.
During the search for information, FTX debtors had to sift through Quickbooks records, senior officials’ laptops and Slack conversations. The report notes that certain FTX Group entities used Quickbooks as their ledgers. It also notes that senior FTX officials “mixed and misappropriated corporate and client funds” and “lied to third parties.” This idea of restarting the exchange was first mentioned in January when Ray confirmed that he was open to the possibility of reviving FTX.
After the news of a possible relaunch was made public, the FTX crypto token, FTT, rose 70% against the US dollar from $1.30 before the court hearing to current $2.44 per unit. A big number of FTT he was illegally released from the main address of the FTT implementer last year. While the failing exchange has FTT, it is highly consolidated, with the top ten wallets holding 94.19% of the circulating supply.
What do you think about the possibility of a relaunch of FTX? Should the exchange be given a second chance or is it time to leave FTX? Share your thoughts in the comments section below.
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