FTX plans to fully repay customers but not restart exchange, says bankruptcy lawyer


The defunct cryptocurrency exchange FTX said its restructuring plans did not include a “reboot” of the firm but focused on repaying customers in full.

In a Jan. 31 hearing in United States Bankruptcy Court for the District of Delaware, FTX attorney Andy Dietderich from law firm Sullivan and Cromwell said the exchange could “cautiously predict” fully repaying users and creditors but added this was “an objective” and not a “guarantee.” He said that “after an exhaustive effort,” there was no plan to restart FTX — dubbed FTX 2.0 — in its current Chapter 11 bankruptcy plan.

“Based on our results to date and current projections, we anticipate filing a disclosure statement in February describing how customers and general unsecured creditors [...] with allowed claims will eventually be paid in full,” said Dietderich. “No investor is ready to commit the needed capital to a restart of the offshore exchange, nor has a buyer emerged for that exchange as a going concern.”

The bankruptcy lawyer added:

“The costs and risks of creating a viable exchange from what Mr. Bankman-Fried left in the dumpster were simply too high.” Dietderich reiterated concerns that under former CEO Sam Bankman-Fried, FTX had kept poor financial and company records regarding assets and employees. The lawyer said that LedgerX — one of the only FTX arms claimed to be solvent when the firm filed for bankruptcy in November 2022 — had been a “horrible investment.”

Bankman-Fried was found guilty of seven felony counts related to fraud at FTX and Alameda Research in November 2023. His sentencing hearing is scheduled for March 28. At roughly the same time as Dietderich’s announcement, FTX Token’s (FTT) price surged more than 12% from $2.67 to $3.01 before falling to $2.24.

In December 2023, FTX debtors proposed claimants receive reimbursement based on the prices of crypto assets at the time of bankruptcy: $16,871 for Bitcoin and $1,258 for Ether. FTX creditors, in turn, proposed “in kind” repayments for crypto holdings. Judge John Dorsey sided with the debtors, saying in a Jan. 31 ruling that the law was “very clear” on the matter.

Source : Cointelegraph by Turner Wright / Jan 31, 2024

rayn.finance logo


240 rue Evariste Galois,

06410 Biot,

Sophia Antipolis

Automata Pay

65-66 Warwick House 4th

Floor, Queen Street, London

England, EC4R 1EB

Automata Pay Europe Ltd

3rd Floor Ormond Building,

31-36 Ormond Quay Upper,

Dublin 7, D07 Ee37

Automata ICO Ltd

Italian Branch

Via Archimede, 161,

00197 Roma


The purchase of digital assets is subject to a high market risk and price volatility. Changes in value can be significant and occur rapidly and without warning. Past performance is not a reliable indicator of future performance. The value of an investment and returns can fluctuate both up and down, and you may not recover the amount you invested. RISK WARNING

Automata ICO Limited has a branch in Italy with its registered office at Via Archimede, 161, Roma, Italy, and registered in Italy under number 96550860587 with the Organismo Agenti e Mediatori (OAM) as a Virtual Asset Service Provider (VASP).

Automata France SAS is a company registered in France with the company number 902 498 617. Automata FRANCE SAS is registered with the french Financial Market Authority, l’Autorité des marchés financiers (“AMF”), as a provider of Virtual Asset Service Provider under number E2023-087.

Automata Pay Europe Limited is a partner of Modulr Finance B.V., a company registered in the Netherlands with company number 81852401, which is authorised and regulated by the Dutch Central Bank (DNB) as an Electronic Money Institution (Firm Reference Number: R182870) for the issuance of electronic money and payment services. Your account and related payment services are provided by Modulr Finance B.V. Your funds will be held in one or more segregated accounts and safeguarded in line with the Financial Supervision Act.