FTX Considers Proposals from 3 Bidders to Revive Crypto Exchange: Report

FTX Trading is now at a crossroads as it evaluates offers from three prospective bidders to resurrect its operations after falling into bankruptcy amidst a storm of fraud allegations.

The fate of this once-pioneering exchange will be decided by mid-December, according to Mr. Kevin Cofsky, the company’s investment banker from Perella Weinberg Partners.

FTX Contemplates Multiple Paths to Recovery

FTX is extensively negotiating with potential investors, exploring various avenues to relaunch the exchange. Options include selling the entire platform, including its list of more than nine million customers, or seeking a strategic partnership to facilitate its revival.

There’s also the possibility that FTX may embark on a solo journey to reboot its trading platform, as stated by Mr. Cofsky, who added, “We are engaging with multiple parties every day” while keeping the bidders’ identities confidential.

This development comes after a draft plan was submitted by FTX in late July, which proposed a strategy that involves dividing its creditors into separate groups of claimants. Additionally, the plan suggested a possible method for one of these groups to resurrect the dormant exchange with assistance from external investors.

The downfall of FTX was marked by the resignation of its co-founder, Sam Bankman-Fried, as Chief Executive in 2022. The company was forced to cease its trading operations due to financial turmoil.

Bankman-Fried is facing trial in New York for charges related to diverting FTX customer funds into another entity under his control. Allegedly, these funds were utilized for high-risk trades, political contributions, and extravagant property acquisitions, actions that ultimately led to the collapse of both companies.

FTX Nears Settlement in Contentious Disputes

Since filing for bankruptcy last year, FTX has diligently worked to raise funds to repay creditors. Court documents reveal that the administrators of FTX have thus far managed to recover approximately $7 billion in assets, including a substantial $3.4 billion in cryptocurrency holdings.

A major milestone has been achieved in the ongoing bankruptcy proceedings as FTX and its principal creditor groups have successfully resolved several contentious disputes. This development paves the way for the company to present a comprehensive payout plan in December, as confirmed by Andrew Dietderich, the firm’s attorney, during the court session.

Usually, these payout plans offer creditors an estimated percentage of recovery. However, in the case of FTX, the exact amount customers can expect to recover is uncertain. This uncertainty is closely linked to the potential value FTX can derive from a possible sale or revitalization of the exchange.


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