Lawyer Says FTX Has Abandoned Revival Efforts, Judge Certifies Controversial Reimbursement Plan

Share This Post

The collapsed cryptocurrency exchange FTX will not be proceeding with efforts to resume operations because none of the prospective suitors has pledged to invest the needed capital, the company’s attorney has said. A U.S. Bankruptcy Court judge has said FTX’s proposal to reimburse users based on November 2022 is the correct interpretation of the law.

None of FTX’s Suitors Wants to Put in the Required Capital

An attorney for the collapsed cryptocurrency exchange FTX reportedly told a bankruptcy court that the company has abandoned efforts to resume operations because none of the prospective investors is willing to put in the required capital to make this happen. According to Andy Dietderich, the attorney who represented FTX in the bankruptcy court, the exchange’s unsuccessful negotiations with possible suitors showed that jailed founder Sam Bankman Fried (SBF) never intended for FTX to operate as a viable business.

Dietderich argued that the costs and risks associated with reviving FTX far outweighed any benefit that comes with any such revival of the crypto exchange.

“FTX was an irresponsible sham created by a convicted felon. The costs and risks of creating a viable exchange from what Mr. Bankman-Fried left in a dumpster were simply too high,” Dietderich said on Jan.31.

FTX’s Controversial Reimbursement Proposal

Rather than restarting the business, FTX will now focus on generating revenue from the sale of its assets. The funds raised will be used to reimburse FTX users whose assets were locked in when the crypto exchange filed for bankruptcy in late 2022. At the time of FTX’s sudden collapse, the USD value of many crypto assets, including Bitcoin (BTC), was at its lowest in that year. However, just over a year after FTX’s collapse, the prices of most crypto assets hit their highest in nearly two years, with BTC having grown by 160% in 2023 alone.

Despite Bitcoin’s rise from just under $17,000 in November 2022 to $42,000 by Jan. 31, 2023, the collapsed cryptocurrency firm’s rescue team has proposed to base the reimbursements on November 2022 prices. This decision has angered users who feel short-changed.

However, U.S. Bankruptcy Judge John Dorsey dismissed the users’ complaints in his ruling. He suggested that FTX had correctly interpreted the bankruptcy law, which clearly states that debts should be repaid based on their value at the time of a bankruptcy filing.

What are your thoughts on this story? Let us know what you think in the comments section below.

Read Entire Article
spot_img

Related Posts

XRP: Social Buzz Points To $0.70, But Technicals Predict Dip To $0.50 First

The value of Ripple’s XRP token has fluctuated dramatically in recent months Talks about the coin are thriving and have reached their highest point since early April, despite an 8% price

Ripple Vs. SEC Reaches Climax With Final Filing: Details

The legal battle between Ripple Labs and the US Securities and Exchange Commission (SEC) has intensified with the SEC’s latest court filing, marking the final submission before Judge Analisa

Investors Pile Into Bitcoin: Over $1 Billion Inflows Fuel ETF Rally, Price Tops $71,000

Lower-than-expected inflation data and a dominant Bitcoin have sparked a cautious return to crypto investment, with the US leading the charge However, whispers of regulatory scrutiny cast a shadow

Nigeria’s SEC-Crypto License

In May 2022, Nigeria’s Securities and Exchange Commission introduced a robust regulatory framework for virtual asset service providers, including digital asset exchanges The framework required

Solana Leaves Competition In The Dust: Blazing Speed To Fuel Price Surge?

Solana (SOL), the self-proclaimed “world’s fastest blockchain,” has been grabbing headlines for its blazing transaction speeds and surging token price But is it all sunshine and

Understanding Notcoin: The Token Behind the Click-to-Mine Telegram Game

This week, the crypto community has been buzzing about a new token called notcoin (NOT), recently launched on The Open Network (TON) This token is tied to a game on Telegram where users earn NOT by
- Advertisement -spot_img