FTX Trading Ltd., formerly a prominent player in the cryptocurrency exchange sector, is carefully considering its future after going through bankruptcy proceedings.
According to a report, during a court hearing in Wilmington, Delaware, Kevin M. Cofsky, the company's investment banker from Perella Weinberg Partners, revealed that a decision regarding the company's direction would be made by mid-December. Additionally, active negotiations are underway with various investors regarding potential binding offers.
Several possibilities are being considered. The options reportedly include selling the entire exchange, which includes its extensive customer base of over 9 million, to the potential of forming a partnership with another entity to revive the platform. Mr Cofsky has contemplated the prospect of FTX independently revitalizing its trading platform. However, the identities of the potential bidders have not been disclosed.
Following its bankruptcy declaration last year, FTX has sought to raise funds for creditor repayment. As per court records, FTX administrators have successfully reclaimed approximately $7 billion in assets, with a substantial $3.4 billion in cryptocurrency.
Additionally, during the court proceedings, the company's attorney, Andrew Dietderich, reportedly disclosed that certain complex disputes with key creditor groups have reached a preliminary resolution. This development allows FTX to proceed with a comprehensive payout strategy by December. Nevertheless, the precise percentage of customer recovery remains undetermined and will largely hinge on the outcome of either selling the exchange or revitalizing it.
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FTX faced a significant setback when its founder, Sam Bankman-Fried, resigned as CEO. This decision came as a response to FTX suspending its trading platform due to financial difficulties. Bankman-Fried is undergoing a trial in New York, where he faces allegations of diverting FTX customer funds to a separate entity under his control. These funds purportedly funded high-risk trades, substantial political contributions, and the acquisition of luxury properties, ultimately leading to the downfall of both businesses.
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