The bankrupt FTX has abandoned efforts to relaunch its cryptocurrency exchange. Instead, it will focus on liquidating its assets and returning funds to customers. The company’s attorney, Andy Dietderich, made the announcement today at a bankruptcy court hearing. He added that FTX had been in talks with potential investors for several months, but none of them were willing to provide enough money to relaunch the cryptocurrency exchange.
Liquidation of assets
The collapse of the talks, according to Dietderich, confirms that FTX founder Sam Bankman-Fried never built the necessary foundations to ensure the company’s viability. Bankman-Fried was convicted last year of fraud in connection with the operation of FTX. “FTX was an irresponsible fraud created by a criminal,” Dietderich said.
FTX filed for bankruptcy protection from creditors in November 2022. It will now focus on liquidating its assets in order to return money to clients whose cryptocurrency accounts were blocked as a result of the bankruptcy.
The funds will be reimbursed according to the November 2022 level
Dietderich said the firm expects to reimburse clients in full. However, it will calculate the value of refunds based on cryptocurrency prices as of November 2022, when the cryptocurrency market was in a downturn.
Dozens of FTX clients complained about this practice, but the bankruptcy court today dismissed those complaints, saying that under U.S. bankruptcy law, debts must be paid based on the value at the time of the bankruptcy filing. The price of bitcoin, the most famous cryptocurrency, currently exceeds $43,000 (roughly CZK 1 million), while in November 2022 it was less than $17,000, Reuters pointed out.
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