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On Thursday, FTT pumped over 100% at the news that FTX may reopen.
The crypto markets underwent a spike at the news that the disgraced crypto exchange FTX may make a partial comeback. FTX Token (FTT) pumped over 100% following the wholly unanticipated reports. FTT is the native token of the FTX ecosystem.
According to FTX’s attorney, Andy Dietderich of the law firm Sullivan & Cromwell, at a U.S. bankruptcy court hearing on Wednesday, bankrupt crypto exchange FTX has recovered cash and crypto assets worth over $7.3 billion.
During the hearing, FTX’s legal team hinted at the potential for the exchange to reopen, according to Bloomberg. They informed Judge John Dorsey that a reorganization plan is scheduled to be filed in July and may be confirmed by the second quarter of next year. According to Dietderich, the move would require a substantial amount of capital or the use of estate funds.
FTX’s Return Is Far From Certain
A possible option was to convert FTX’s creditors’ shares into stakes in the reopened exchange. However, the decision on whether to restart the exchange was far from final. “There are as many opinions on this, I think, as there are professionals involved in this case,” Dietderich told Bloomberg. “And that’s a lot.”
The exchange has managed to collect more than $800 million in assets since January. Dietderich said the company was attempting to understand what went wrong under the leadership of indicted ex-founder Sam Bankman-Fried. The lawyer also claimed that the situation has stabilized.
The company’s new CEO, John Ray III, has highlighted improper fund transfers and poor accounting at the collapsed crypto exchange, referring to it as a “complete failure” of controls.
FTX filed for bankruptcy in November 2022 after traders withdrew $6 billion from the platform in just three days. Days before, the rival exchange Binance had abandoned a rescue deal. Former CEO Bankman-Fried is currently facing decades in prison.