FTX may use money marked to repay customers to restart its failed crypto exchange because the project would require a significant amount of cash, a lawyer for the company said in court Wednesday.
(Bloomberg) — FTX may use money marked to repay customers to restart its failed crypto exchange because the project would require a significant amount of cash, a lawyer for the company said in court Wednesday.
The company is still in the early stages of deciding whether to bring back the exchange, which allowed customers to trade digital assets before FTX collapsed, Andrew G. Dietderich, an FTX attorney with law firm Sullivan & Cromwell told US Bankruptcy Judge John T. Dorsey. The company could also try to raise money to fund a restart or drop the entire concept.
“There are as many opinions on this as there are professionals in this case, and that’s a lot,” Dietderich said.
The original FTX trading app was a “facade” that was more like a video game than a professional, properly functioning exchange, Dietderich said in court.
Funds needed to restart the exchange could come from third parties willing to invest in the project, or FTX could use some of the $7.3 billion worth of cash, crypto and other assets it has so far collected, he said. That money is being held until FTX wins final court approval for a creditor payout plan, something that is unlikely until next year, Dietderich said.
The company is talking with the official committee of unsecured creditors about restarting the exchange, he said.
The company was in court seeking more time to prepare a creditor payout plan. Dorsey agreed to give the company until Sept. 7 to file the plan. After that, creditors would be free to propose their own version.
Dietderich said the company intends to win final court approval for the plan sometime in the second quarter of next year.
The case is FTX Trading Ltd., 22-11068, U.S. Bankruptcy Court for the District of Delaware.
(Updates with creditor talks and deadline for the company to file a bankruptcy plan.)
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