FTX is in talks with three bidders to restart the cryptocurrency exchange

2023-10-25 03:12:41

By Steven Church, Forbes; Compiled: Pine Snow, Golden Finance

FTX Trading Ltd. is considering a proposal from three bidders to restart trading at the company, which was once one of the world’s largest cryptocurrency exchanges, before it went bankrupt due to fraud allegations.

Kevin M. Cofsky of Perella Weinberg Partners, the firm’s investment banker, said Tuesday at a court hearing in Wilmington, Delaware, that the firm will make a decision on how to proceed by mid-December. Cofsky said FTX is in talks with investors on the details of a potentially binding offer.

Cofsky told U.S. bankruptcy judge John Dorsey that options include selling the entire exchange, including a list of more than 9 million customers, or bringing in partners to help restart the exchange. He said FTX is also considering restarting its trading platform on its own.

“We are in contact with multiple parties every day,” Cofsky said, without naming the bidders.

Since filing for bankruptcy last year, FTX has struggled to raise money to pay off creditors. According to court documents, FTX’s managers have recovered about $7 billion in assets to date, including $3.4 billion in cryptocurrencies.

Andrew Dietderich, a corporate lawyer, said in court that FTX and its group of major creditors have tentatively resolved some of the toughest disputes in the case, which will allow the company to file a detailed payment plan in December.

During the bankruptcy process, such plans will typically provide creditors with an estimate of the expected recoverable amount, expressed as a percentage. But Dietderich said FTX doesn’t know what customers will get. The recovery percentage will depend in part on how much value FTX can get from a potential sale or restart of the exchange.

FTX founder Sam Bankman-Fried stepped down as CEO last year after the company shut down trading platforms to deal with financial turmoil. Bankman-Fried is currently on trial in New York for transferring FTX client funds to another company he controls. Before the two companies collapsed, the money was allegedly used to conduct high-risk transactions, political donations and buy expensive properties

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