FTX: the return of the crypto undead makes the FTT token twitch

The lawyers from FTX at Sullivan & Cromwell presented a scenario from restart of the crypto exchange to justice. A hypothesis which would however require gather beforehand of the capital.

Rather the return of the undead or mission impossible? It is still difficult to choose between one or the other scenario. Both are plausible at this stage.

For lawyers at Sullivan & Cromwell, which is defending FTX in court, the future of the cryptocurrency exchange is not yet decided.

To relaunch or not to relaunch FTX?

At a hearing before bankruptcy judge John Dorsey, attorney Andrew Dietderich presented a reboot of the exchange as one of the options currently under consideration.

To make such a hypothesis possible, some conditions would have to be met, however, he points out. The most important one would be to gather sufficient funds. After such a fiasco and despite the departure of the leaders, a new FTX can it still hope to convince investors and customers?

Success is indeed far from guaranteed. Moreover, Dietderich specifies that the company is only at the beginning of its reflection on a possible restart of the platform and a reopening of trading for its customers.

There are as many opinions on the matter as there are professionals in this case, and that’s a lot,” the lawyer says again with irony. The return of the undead of the crypto is far from unanimous among his counsel.

The exchange has $7.3 billion and creditors

The scenario requires funds. This can come from two different sources. It can be new capital. The second solution would be to draw on the 7.3 billion in assetsincluding cash and crypto, available to the company.

FTX does not have access to these funds at this time. The assets are frozen pending court approval of a creditor repayment plan. Sullivan & Cromwell’s attorney acknowledges that such an outcome is not likely until 2024 at best.

Nevertheless, the legal expert indicates that discussions are underway with the official committee of unsecured creditors regarding a restart of the exchange – at a time yet to be determined.

FTT’s share price jumps 100%.

The formalization of the repayment plan must first be finalized. However, the company has just requested and obtained an additional delay from the court. The plan will have to be filed at the latest on September 7, 2023.

Negotiations can then begin with the creditors in order to reach an agreement. Dietderich hopes for a conciliation and the green light from the courts around the 2nd quarter of 2024. Return of the living dead or mission impossible, the scenario remains perfectly uncertain.

The uncertainty does not dampen the optimism of the holders of FTTthe native token of FTX. These statements were met with a price surge of over 100%. The price went from $1.30 to $2.70 within an hour.

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