A return that had not been anticipated? FTX lawyers claimed recently that the exchange could reopen in the coming months. If the possibility is debated, it has however had an effect on the price of FTT, which has exploded upwards. Decryption.
The FTX platform may reopen soon
Lawyers representing the exchange disclosed about the recovery of client funds during a hearing in FTX’s bankruptcy proceedings. Icompany would have managed to get its hands on 7.3 billion dollars in cash and liquid crypto assets. A significant sum, but which is not yet sufficient: we know for example that the platform owes 3 billion dollars to its 50 most important creditors.
This step, however, seems encouraging for FTX’s lawyers. One of them, Andy Dietderich, said that “the situation was now stabilized, and the blaze was extinguished“. The team dedicated to the failure of the exchange is now considering the future… With maybe a reopening of FTX.
Two solutions are envisaged: on the one hand, to return part of the funds to the customers who have been harmed. On the other, reopen the exchange platform, and offer aggrieved customers a share of FTXin compensation, again according to Andy Dietderich:
“There are possibilities that customers may have the option to partake of monies they would otherwise have recovered in cash […] in order to receive in return some sort of interest in the trading platform.»
No decision has been made yet, but the announcement could be made as early as this quarter. The most burning question this raises is: should we reopen an exchange whose management has been so catastrophic ?
A damning report was published a few days ago which shows the absolute lack of rigor of FTX teams in considering client funds. All of the cryptocurrencies hosted on the platform were indeed on “hot wallets”, and several people had access to the keys – the multisig not being used. A point recalled by FTX’s lawyer, explaining that this could raise questions about the need to reopen the platform:
“The app [de FTX] worked very well, but in reality it was a facade.»
Reopening the trading platform is therefore a thorny possibility, and it is probably not insignificant that FTX’s lawyers bring up the idea for the first time in front of the public. The reactions should indeed be numerous.
👉 To go further – FTX: Why? Update on the giant’s bankruptcy in 3 acts
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FTT price explodes in reaction to this possible reopening
If the possible reopening of FTX raises many questions, the news alone was enough to blow up the price of the FTT. FTX’s native cryptocurrency had seen its price plummet during its fall, but it experienced a particularly noticeable jump at the end of the day yesterday:
The very rapid explosion of the FTT price
In total, the FTT has seen its value increase +126% in the space of an hour and a halfe. The price briefly touched 3 dollars, before falling back to around 2.4 dollars this morning. We remain very far from the absolute record of the FTT, which had reached 84 dollars in September 2021, but this shows that movements are still not excluded for those who still hold FTT.
However, the greatest caution is advised with respect to FTX and its related assets. We are only at the beginning of the bankruptcy procedure, and it is quite probable that we do not yet know everything about the catastrophic management of the company. The coming months should therefore clarify the situation.
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Source: Reuters – Chart: TradingView
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Journalist at Cryptoast, I fell into the pot of cryptocurrencies a few years ago. I am passionate about the innovative technologies that stem from the blockchain and I like to find the most crispy information to share with you.
Marine Debelloir
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