A comeback that wasn’t anticipated? FTX’s lawyers recently claimed that the trading platform could reopen in the coming months. If the possibility is debated, it has however had an effect on the price of FTX, which exploded upwards. Decryption.
The FTX platform could reopen soon
Lawyers representing the exchange platform communicated about the recovery of customer funds during a hearing in FTX’s bankruptcy proceedings. The company reportedly managed to get its hands on $7.3 billion in cash and crypto liquid assets. A large sum, but still not enough: for example, we know that the platform owes $3 billion to its 50 largest creditors.
However, this step seems encouraging for FTX’s lawyers. One of them, Andy Dietderich, said that “the situation is now stabilized, and the fire has been extinguished”. The team dedicated to the bankruptcy of the exchange is now considering the future… With perhaps a reopening of FTX.
Two solutions are being considered: on the one hand, to pay back some of the funds to the clients who were harmed. On the other hand, to reopen the exchange platform, and to propose to the damaged customers a share of FTX, in compensation, always according to Andy Dietderich :
“There are possibilities that customers could have the option of taking a share of the money they would otherwise have recovered in cash […] in order to receive in return some sort of interest in the exchange platform. “
No decision has been made yet, but the announcement could come as early as this quarter. The most burning question this poses is whether to reopen an exchange platform that has been so disastrously managed…
A damning report was published a few days ago, which shows the absolute sloppiness of FTX teams in taking care of client funds. All the cryptocurrencies hosted on the platform were indeed on “hot wallets”, and several people had access to the keys – the multi-sig was not used. A point that FTX’s lawyer recalled, explaining that this could raise questions about the need to reopen the platform:
“The [FTX] application was working fine, but in reality it was a front. “
Reopening the exchange platform is therefore a thorny possibility, and it’s probably not insignificant that FTX’s lawyers are bringing up the idea for the first time in public. The reactions should indeed be numerous.
FTT 1 price rises in reaction to possible reopening
While there are many, many questions surrounding the potential reopening of FTX, the news alone was enough to send the FTT price soaring. FTX’s native cryptocurrency had seen its price plummet during its fall, but it had a particularly notable surge late yesterday:
The very rapid explosion of the FTT price
In total, FTT saw its value rise +126% in the space of an hour and a half. The price briefly touched $3, before dropping back down to around $2.4 this morning. This is still a far cry from the all-time high for FTT, which reached $84 in September 2021, but it shows that moves are still possible for those who still hold FTT.
However, we would advise extreme caution with regard to FTX and its related assets. We are only at the beginning of the bankruptcy proceedings, and it is quite likely that we still do not know everything about the catastrophic management of the company. The next few months should therefore clarify the situation.
