FTX could be revived as more customers’ funds recovered, say lawyers

theguardian.com:

The defunct cryptocurrency exchange FTX has recovered $7.3bn (£5.8bn) of customer funds and could be restarted as a going concern as soon as next year, the company’s lawyers have said.

“The situation has stabilised, and the dumpster fire is out,” its attorney Andy Dietderich said during a hearing at a Delaware bankruptcy court.

FTX spectacularly collapsed in November, triggering a “crypto winter”. Its founder, Sam Bankman-Fried, was later arrested and extradited from the Bahamas to the US.

In mid-November, when FTX filed for bankruptcy, the company had collected just $3.3bn of assets to distribute among stakeholders. Recovery efforts have more than doubled that figure so far, court filings show, including $800m in recovered cash and a further $600m in “settlements and investments receivable”.

But the biggest sum has been in “category A crypto” tokens with large and liquid markets. FTX now has more than $4bn of crypto assets under its control, a total that has been bolstered by a sharp recovery in cryptocurrency prices.

Bitcoin, which had dropped below $20,000 after FTX’s collapse, this week broke $30,000 for the first time since June 2022, with other cryptocurrencies including ethereum charting a similar course.

That price increase has put more than $1bn back in the coffers of FTX, court filings show. The company plans to complete an assessment of the possibility of restarting the exchange by the end of the June, and ultimately confirm its goals within a year after that date.

But Dietderich said the actual customer shortfall remained unknown, according to a court report from Reuters. The company’s legal team is still working to accurately recreate internal records of FTX’s accounts, and external estimates from the US Commodity