- FTX is in talks with three top bidders as it considers a proposal to restart in 2024.
- In a court hearing, the company’s investment banker revealed that the exchange would make a final decision in December.
Speculation of FTX restarting next year has now been confirmed in a court hearing on Tuesday. FTX Trading Ltd. investment banker Kevin M. Cofsky of Perella Weinberg Partners, on Tuesday, told a court hearing in Delaware that the exchange was negotiating potentially binding deals with three bidders looking to relaunch the trading platform.
Prior to its collapse which saw the company sink into bankruptcy, FTX was one of the most popular crypto exchanges with one of the highest market shares. At its height, billions of dollars were traded daily on the exchange. During its collapse in November 2022, it was revealed that the exchange had a huge deficit with billions of dollars of customer funds siphoned out of the exchange through its sister company Alameda Research.
Read More: FTX Former Law Firm Accused of Setting Up “Shadowy Entities” Allowing FTX co-founder SBF and Other Executives to Commit Fraud
Recently, clawback efforts from the bankrupt crypto exchange, in addition to the company making tremendous efforts in raising capital from companies it had previously invested in have led to optimism that customers will be made a whole again. Furthermore, as CNF recently reported, FTX Debtors have revealed a plan to repay creditors up to 90 percent of their locked funds. If the bankruptcy court approves the plan, these repayments will be made in Q2 2024.
Without revealing the names of the bidders, Cofsky stated, “We are engaging with multiple parties every day.” Dubbed FTX 2.0, the reboot would involve new leadership and would be obliged to be transparent in its day-to-day activities. One of the ways is through proof of reserves – public proof regarding their reserves to show their solvency to their depositors through an independent audit.
Related: OKX publishes the 2nd Proof of Reserves Report. Everything you need to know
Sam Bankman-Fried who resigned as the exchange CEO after the bankruptcy filing is facing two counts of fraud and five counts of conspiracy. The case against the co-founder who is central to the fraud in the exchange, faces decades in prison if found guilty. The prosecution is expected to rest its case later this week with Bankman-Fried set to begin his defense on the same date although he has the right to waive the case. Legal experts have noted that in 95 percent of similar cases prosecuted by the government, they end with an indictment.
The success of FTX 2.0 is likely to be limited given the events of the last year. The exchange has become infamous in the crypto community and few would be willing to trade on its reboot regardless of the executives running it.
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