FTX, the cryptocurrency exchange that collapsed spectacularly in November, is considering reopening at some point in the future as it navigates bankruptcy, its attorneys from Sullivan & Cromwell said in a court hearing on Wednesday.
One potential option discussed was to let FTX's creditors convert a portion of their holdings to a stake in a reopened exchange.
FTX's FTT token more than doubled in price following the news.
Andy Dietderich, the lead attorney for FTX, told the court that re-starting the exchange was one of many potential options being considered for the future of the company.
If that path is taken, Dietderich said, the plan would require significant capital to be raised, and said there was internal debate over whether that capital should come from the FTX estate's capital or third-party capital.
"There are possibilities that customers could have an option to take part of their proceeds that they would otherwise receive in cash from the estate and receive some kind of an interest in the exchange going forward," Dietderich said.
However, the attorney stressed that the possibility of re-starting FTX is one of many, and any decisions are far from final."There are as many opinions on this, I think, as there are professionals involved in this case," Dietderich said. "And that's a lot."
The FTX attorneys also told the court they've recovered $7.3 billion in liquid assets from the defunct exchange, up from January's $1.9 billion tally. However, they added, FTX is still "far away from an equity distribution."
UPDATE (April 12, 2023, 17:55 UTC): Adds the amount FTX has recovered and updates size of FTT's surge. Adds comments from the hearing.
UPDATE (April 12, 2023, 18:27 UTC): Updates size of FTT's surge.
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