FTX Scraps Plans To Revive Exchange, Will Repay Billions To Customers

A lawyer for FTX said the defunct crypto exchange has abandoned its plans to relaunch, instead opting to liquidate all assets and return funds to customers. The Guardian reports: The exchange, founded by Sam Bankman-Fried, has been negotiating for months with potential bidders and investors, but none were willing to put in enough money to rebuild it, FTX attorney Andy Dietderich said at a bankruptcy court hearing in Delaware. The failed negotiations underscored the fact that FTX was never what it appeared to be, and that Bankman-Fried never built the underlying technology or administration necessary to run the company as a viable business, Dietderich said. Bankman-Fried has been convicted on fraud charges related to his operation of FTX. He faces decades in prison. "FTX was an irresponsible sham created by a convicted felon," Dietderich said. "The costs and risks of creating a viable exchange from what Mr Bankman-Fried left in a dumpster were simply too high." The company will instead focus on liquidating its assets to repay customers whose cryptocurrency deposits were locked when the company filed for bankruptcy in November 2022. FTX has recovered over $7 billion in assets to repay customers, and it has reached agreements with government regulators who have agreed to wait until customers are fully repaid before attempting to collect on about $9 billion in claims, Dietderich said. While FTX plans to repay its customers, the exchange will calculate their repayment based on cryptocurrency prices from November 2022, when the crypto market was suffering a prolonged slump. "The price of bitcoin has risen to about $43,300 from its November 2022 price of $16,872," notes the report.

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