FTX Trading Ltd. used to be one of the most significant exchanges in the market, but now it is engaged in crucial negotiations to survive bankruptcy.
After declaring bankruptcy due to fraud allegations, the company is considering offers from three potential bidders to resume its operations.
The final decision is expected to be made around mid-December, as disclosed by Kevin M. Cofsky, the company’s investment banker.
The options under consideration are diverse and will shape the future of FTX. One possibility is the complete sale of the platform, which would encompass its list of over 9 million customers.
Another option is seeking a strategic partner to collaborate in the resumption of operations. Finally, FTX is also contemplating the option of relaunching the platform independently.
Since filing for bankruptcy last year, FTX has been striving to raise funds to settle its outstanding debts. Thus far, the company’s administrators have successfully recovered approximately $7 billion in assets, including a significant $3.4 billion in cryptocurrencies.
While this represents a crucial step on the path to recovery, there are still many decisions to be made, and FTX’s success is by no means guaranteed.
What Happened to FTX and What Awaits Its Future
On the other hand, the founder of FTX, Sam Bankman-Fried, resigned as CEO last year amid the company’s financial crisis.
At this moment, he is facing a trial in New York on charges related to the alleged transfer of customer funds to another company under his control.
These funds are said to have been used for risky trades, political donations, and property acquisitions before both companies collapsed. The outcome of this trial could also have an impact on FTX’s future.
FTX, along with its major creditors, managed to resolve some of the most intricate disputes in the case. This paves the way for the submission of a detailed payment plan in December.
Typically, these plans offer creditors an estimate, expressed as a percentage, of how much they can expect to recover.
Nevertheless, the company currently remains uncertain about the recovery percentage it will offer to its clients. This uncertainty is partly contingent on the value that can be obtained from a potential sale or relaunch of the exchange platform.
