The once-collapsed FTX cryptocurrency exchange has recovered $7.3 billion in liquid digital assets and cash. Since January, this figure has increased by $800 million, according to a statement by the company's lawyer, Andy Dietderich who testified on Wednesday before the American Bankruptcy Court.
FTX Benefits from Rising Crypto Prices
Dietderich admitted that the value of recovered assets would have been $1 billion lower if not for the strong growth of cryptocurrencies since the beginning of the year. For example, Bitcoin (BTC), the largest and oldest digital asset, has gained over 80% in the past three months.
Part of the recovered funds came from a deal with Modulo Capital to raise $400 million in cash that was in the hedge fund's accounts. The funds were sent by FTX-related companies in 2022.
After users withdrew over $6 billion from the platform in just three days in November, and Binance pulled out of a rescue deal proposal, the once-massive digital asset exchange declared bankruptcy. However, a few months later, it is reconsidering its future and the future of its Founder, Sam Bankman-Fried (SBF), who has not yet been convicted in the alleged misappropriation of client funds.
SBF was replaced as the CEO by John Ray, who claims that improper fund transfers, coupled with poorly managed accounting books, were the main reasons for the collapse of the once-thriving crypto machine.
"The situation has stabilized, and the dumpster fire is out," Dietderich said in the US Bankruptcy Court in Delaware.
JUST IN: Bankrupt FTX has recovered $7.3 billion in assets and is considering relaunching the exchange in Q2.
— Watcher.Guru (@WatcherGuru) April 12, 2023
Will FTX Cryptocurrency Exchange Rise Again?
Although FTX was one of the most high-profile collapses in the cryptocurrency market and caused a massive crisis in the industry, leading to a slump in the value of major tokens and the bankruptcy of other companies, those associated with the platform want it to reopen its doors to customers.
FTX is negotiating with shareholders about restart options, and the exchange's lawyer expects a final decision by the end of the current quarter. However, the platform would need to raise significant capital to cover its obligations to all retail clients whose funds have been frozen. So far, only Japanese traders have been granted the ability to withdraw deposits due to strong regulations in that market. In just one day, users from Japan withdrew $50 million from the $138 million in cash that the Japanese subsidiary held when it ceased operations.
Dietderich believes securing external financing or selling some of the platform's assets may be necessary to relaunch the exchange.
CySEC Extends FTX Europe's License Suspension, Talks About Withdrawals
CySEC recently revealed that FTX EU LTD has begun the process for customers to request final account balances and withdraw fiat funds from segregated accounts. The market regulator anticipates a smooth and swift withdrawal process.
In response to FTX EU's announcement regarding the initiation of procedures to return segregated funds to investors under Cyprus law, CySEC's Chair, Dr George Theocharides expressed satisfaction that regulatory efforts have culminated in a positive outcome, following months of investor unease and apprehension.
FTX EU LTD (Cyprus) (formerly K-DNA Financial Services LTD) is commencing a process for its customers to request final balances on a dedicated website. Read details here: https://t.co/qamNICqGY4
— FTX (@FTX_Official) March 31, 2023
Additionally, CySEC confirmed an extension of the suspension of FTX EU's authorization until the end of September 2023. The Cyprus Investment Firm (CIF) license was initially suspended on November 11, 2022, in the wake of FTX.com, Alameda Research, and over 130 affiliates filing for bankruptcy. The suspension was then prolonged until the end of March 2023, and now it has been extended even further.
