FTX's December Decision Could Be a Game-Changer

<p>Although it
seemed that the crypto exchange FTX would not recover after its high-profile
collapse in November 2022, its operator is now considering proposals from three
bidders to restart its operations. The company had filed for bankruptcy amid
allegations of fraud and is expected to decide on its future by mid-December.</p><p>Options on the Table for
FTX's Revival</p><p>During a
recent court hearing, Kevin M. Cofsky, the company's investment banker from
Perella Weinberg Partners, revealed that <a href="https://www.financemagnates.com/tag/ftx/" target="_blank" rel="follow">FTX Trading Ltd. </a>is negotiating
potentially binding offers. The options being considered include selling the
entire <a href="https://www.financemagnates.com/terms/e/exchange/">exchange</a>, which boasts a valuable customer list of over 9 million, or
partnering with another firm to relaunch the platform. Alternatively, FTX is
contemplating rebooting the trading platform independently.</p><p><a href="https://www.financemagnates.com/cryptocurrency/ftx-the-rise-the-fall-and-the-reaction/" target="_blank" rel="follow">Since its
bankruptcy filing last year</a>, FTX has been actively working to raise funds to
repay its creditors. According to court documents, the administrators have
recovered approximately $7 billion in assets, including $3.4 billion in
cryptocurrency.</p><p>Andrew
Dietderich, the company's attorney, stated that FTX and its main creditor
groups have tentatively settled some of the most challenging disputes. This
settlement will enable the company to file a detailed payout plan in December.
However, the exact recovery percentage for creditors and customers remains
uncertain. What is more, it will partly depend on the value generated from a
potential sale or reboot of the exchange.</p><blockquote><p lang="en" dir="ltr">Bloomberg: FTX is in talks with three bidders to restart FTX and will make a decision by mid-December. Possible options include selling the entire exchange, including its list of 9 million customers, or bringing in a partner to help restart the exchange, while FTX is also…</p>— Wu Blockchain (@WuBlockchain) <a href="https://twitter.com/WuBlockchain/status/1716994690304860526?ref_src=twsrc%5Etfw">October 25, 2023</a></blockquote><p>What Happened to Sam Bankman-Fried?</p><p>The
company's founder, Sam Bankman-Fried (SBF), stepped down as CEO last year amid
financial turmoil. He is currently facing trial in New York for allegedly
diverting FTX customer funds into another company he controlled. These funds
were reportedly used for high-risk trading, political donations, and purchasing
expensive properties before both companies went under.</p><p>Currently, SBF's
legal team <a href="https://www.financemagnates.com/cryptocurrency/sam-bankman-frieds-lawyer-refutes-claims-of-reckless-investments-in-ftx-report/" target="_blank" rel="follow">is challenging these allegations</a>, asserting that the investments his
company undertook were neither "reckless" nor "frivolous". This counters the claims made by Nishad Singh, FTX's former Chief Technology
Engineer, who has been testifying in the ongoing fraud trial. Singh, under
cross-examination, expressed his belief that FTX could have managed the
challenges even after identifying a shortfall of $13 billion in customer funds in
September 2022.</p><p>In a separate
hearing, Zac Prince, the CEO of BlockFi, took the stand in the continuing legal
battle involving Sam Bankman-Fried. <a href="https://www.financemagnates.com/cryptocurrency/sam-bankman-frieds-trial-blockfis-ceo-discloses-billion-dollar-loss-links-with-alameda/" target="_blank" rel="follow">Prince discussed a loss of one billion
dollars</a> that his <a href="https://www.financemagnates.com/terms/c/crypto-lending/">crypto lending</a> company suffered in dealings with Alameda
Research and FTX. BlockFi's association with Alameda Research dates back to
between 2020 and 2021. Prince revealed that loan agreements existed between the
two firms, and by May 2022, BlockFi had loaned as much as $1 billion to
Alameda.</p><p>Listen to this article</p>

This article was written by Damian Chmiel at www.financemagnates.com.