FTX abandons resurrection plans in favor of liquidation to fully refund crisis-hit customers
In a significant development in the FTX bankruptcy saga, the company has decided that it will not revive the exchange and will instead liquidate its assets to fully compensate its customers affected by the crash.
The decision was announced by FTX’s lawyer, Andy Dietderich, at the exchange’s last bankruptcy hearing on January 31. According to CryptoSlate data, the exchange’s native token, FTT, dropped 13.95% following the news and is currently trading at $2.33.
Restart not possible
He announced that despite months of talks with potential investors and bidders, the company was unable to secure sufficient financing to rebuild the stock market. This lack of interest from investors has been attributed to inherent flaws in FTX’s operations, as revealed during bankruptcy proceedings.
Dietderich said FTX was “fundamentally flawed” and lacked the necessary technology and administrative structure to operate properly. He pointed out that the actions of the company’s founder, Sam Bankman-Fried, who was convicted on fraud charges, were at the root of the company’s collapse.
Dietderich added that FTX is an “irresponsible fraud” and that it would be impractical to resurrect the exchange from its current state.
Instead, FTX will focus on liquidating over $7 billion in recovered assets to repay customers. These assets were frozen when FTX filed for bankruptcy in November 2022. Regulators reportedly agreed to hold off on their demands until the exchange refunds customers.
Difficult refund process
However, the refund process is not contentious. Customers have expressed concerns about the valuation of their refunds, which are based on cryptocurrency prices as of November 2022, a period of significant market collapse.
This valuation method has led to complaints of short-changing, especially given the subsequent rise in cryptocurrency values.
However, U.S. Bankruptcy Judge John Dorsey approved the use of November 2022 prices in repayment calculations. He explained that US bankruptcy law requires debts to be repaid according to their value when filing for bankruptcy and leaves no room for alternative interpretations.
Customers are warned to prepare for a potentially lengthy refund process as FTX still needs to review and verify the legitimacy of the claims. This development follows FTX’s dramatic bankruptcy filing in November 2022, which left millions of customers facing significant financial losses.
#FTX #abandons #resurrection #plans #favor #liquidation #fully #refund #crisishit #customers
In a significant development in the FTX bankruptcy saga, the company has decided that it will not revive the exchange and will instead liquidate its assets to fully compensate its customers affected by the crash.
The decision was announced by FTX’s lawyer, Andy Dietderich, at the exchange’s last bankruptcy hearing on January 31. According to CryptoSlate data, the exchange’s native token, FTT, dropped 13.95% following the news and is currently trading at $2.33.
Restart not possible
He announced that despite months of talks with potential investors and bidders, the company was unable to secure sufficient financing to rebuild the stock market. This lack of interest from investors has been attributed to inherent flaws in FTX’s operations, as revealed during bankruptcy proceedings.
Dietderich said FTX was “fundamentally flawed” and lacked the necessary technology and administrative structure to operate properly. He pointed out that the actions of the company’s founder, Sam Bankman-Fried, who was convicted on fraud charges, were at the root of the company’s collapse.
Dietderich added that FTX is an “irresponsible fraud” and that it would be impractical to resurrect the exchange from its current state.
Instead, FTX will focus on liquidating over $7 billion in recovered assets to repay customers. These assets were frozen when FTX filed for bankruptcy in November 2022. Regulators reportedly agreed to hold off on their demands until the exchange refunds customers.
Difficult refund process
However, the refund process is not contentious. Customers have expressed concerns about the valuation of their refunds, which are based on cryptocurrency prices as of November 2022, a period of significant market collapse.
This valuation method has led to complaints of short-changing, especially given the subsequent rise in cryptocurrency values.
However, U.S. Bankruptcy Judge John Dorsey approved the use of November 2022 prices in repayment calculations. He explained that US bankruptcy law requires debts to be repaid according to their value when filing for bankruptcy and leaves no room for alternative interpretations.
Customers are warned to prepare for a potentially lengthy refund process as FTX still needs to review and verify the legitimacy of the claims. This development follows FTX’s dramatic bankruptcy filing in November 2022, which left millions of customers facing significant financial losses.
#FTX #abandons #resurrection #plans #favor #liquidation #fully #refund #crisishit #customers