FTX Trading Considers Restarting Failed Crypto Exchange With Creditor Money

Key Points:

• FTX Trading is considering using customer repayment funds to restart the failed crypto exchange.
• Andrew G. Dietderich, an FTX attorney, stated that the project would require a significant amount of cash.
• The company is still in the early stages of deciding whether to restart the exchange or abandon the concept.

Bloomberg reported FTX is considering using money marked to repay customers to restart the exchange. According to Sullivan & Cromwell lawyer, Andrew G. Dietderich, the project would require a significant amount of cash.

However, 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. They could also try to raise money to fund a restart or drop the entire concept. Dietderich said that as many opinions exist on this matter as there are professionals in this case.

Dietderich also mentioned in court that the original FTX trading app was a “facade” that was more like a video game than a professional, properly functioning exchange. 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. However, that money is being held until FTX wins final court approval for a creditor payout plan, which is unlikely until next year, as Dietderich mentioned.

FTX Trading Ltd. is talking with the official committee of unsecured creditors about restarting the exchange, and the company was in court seeking more time to prepare a creditor payout plan. Dorsey, the judge, agreed to give the company until September 7 to file the plan, and after that, creditors would be free to propose their own version. Dietderich said that the company intends to win final court approval for the plan sometime in the second quarter of next year.

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