Bankrupt cryptocurrency exchange FTX is reportedly considering relaunching after recovering $7.3 billion in assets.
Company attorneys say the exchange has begun to look to the future after a months-long effort to track down assets and determine what went wrong under its former leadership, Reuters reported from a Wednesday (April 12) bankruptcy court hearing.
“The situation has stabilized, and the dumpster fire is out,” FTX attorney Andy Dietderich said.
According to the report, the $7.3 billion figure is an increase of $800 million since January. FTX declared bankruptcy last year following a liquidity crisis. Its founder, one-time crypto wunderkind Sam Bankman-Fried, is facing numerous criminal charges for an alleged fraud scheme that led to the company’s collapse. He has pleaded not guilty.
Read more: FTX Debtors Say ‘Greed & Incompetence’ Triggered Collapse
Now, the company is working with stakeholders on a path to restarting the exchange, and could reach a decision on that move this quarter, Dietderich said.
However, FTX would need substantial capital restart, as its existing customer interface was barely connected to the behind-the-scenes movement of money, Dietderich told the court.
“The app worked beautifully, but in truth it was a facade,” he said.
He added that it’s not yet clear whether FTX should use its own money to relaunch, rather than using those funds to pay back customers. A restart of FTX could require third-party financing or selling off assets.
The hearing came days after FTX’s debtors released a report arguing that the company’s downfall stemmed from a small group of executives — led by Bankman-Fried — who apparently had no desire to establish proper controls.
“These individuals stifled dissent, commingled and misused corporate and customer funds, lied to third parties about their business, joked internally about their tendency to lose track of millions of dollars in assets, and thereby caused the FTX Group to collapse as swiftly as it had grown,” the FTX debtors wrote.
“In this regard,” they added, “while the FTX Group’s failure is novel in the unprecedented scale of harm it caused in a nascent industry, many of its root causes are familiar: hubris, incompetence, and greed.”
