The bankrupt cryptocurrency exchange FTX has attracted interest from several potential buyers looking to restart trading on the platform, according to recent court testimony.
At least three bidders remain in discussions with FTX about acquiring the company’s assets and customer base of over 9 million users. FTX’s bankruptcy advisor Kevin Cofsky said a decision could be made by mid-December between selling the exchange, partnering with an outside firm to relaunch it, or using a “stalking horse” bid to kickstart an auction process.
Keypoints
- FTX has received multiple bids from potential buyers interested in restarting the crypto exchange, which filed for bankruptcy last November. At least 3 bidders are still in the running.
- A decision on selling or restarting FTX could be made by mid-December. The bankruptcy court needs to approve any deal.
- Options on the table include selling FTX entirely, including its valuable customer list of over 9 million users. Or bringing on a partner to help restart trading on the platform.
- FTX is also considering rebooting the exchange on its own.
- FTX collapsed due to allegations of fraud and mismanagement under founder Sam Bankman-Fried. He is currently facing criminal charges.
- If FTX is sold or restarted, it’s unclear how that would impact ongoing bankruptcy proceedings and attempts to repay victims of the FTX collapse. Estimates show FTX owes $166 million to US customers and $8.9 billion to international customers.
- Some are skeptical that the FTX brand could recover given the massive scale of the collapse and ongoing criminal case against its founder.
However, it remains unclear if reviving the FTX name is possible given the massive fraud allegations that led to its downfall last November. FTX filed for bankruptcy after its balance sheet was revealed to be in disarray and its founder Sam Bankman-Fried was accused of misappropriating customer funds.
Bankman-Fried is currently facing criminal charges and up to 115 years in prison over the alleged multi-billion dollar fraud. FTX owes an estimated $166 million to American customers and $8.9 billion to international users. It’s uncertain if a sale or restart of FTX would help facilitate repayment of these debts.
Some industry experts are skeptical that customers would trust the FTX brand again after its spectacular collapse under the leadership of Bankman-Fried. The ongoing criminal case against him continues to reveal stunning details about the exchange’s lack of financial safeguards and oversight.
However, FTX’s large user base and state of the art trading technology could still attract buyers hoping to leverage these assets. The exchange traded over $10 billion per day at its peak last year.
Reviving a brand associated with one of crypto’s biggest alleged frauds may prove a tall task, even for an opportunistic investor – would you ever trust them with your money again?
