FTX’s Remarkable Recovery
The once-collapsed FTX cryptocurrency exchange has made a surprising comeback, recovering $7.3 billion in liquid digital assets and cash. Since January, this figure has increased by $800 million, according to the company’s lawyer, Andy Dietderich, who testified on Wednesday before the American Bankruptcy Court. A significant factor in the recovery was the strong growth of cryptocurrencies since the beginning of the year, with Bitcoin (BTC) gaining over 80% in the past three months. Additionally, a deal with Modulo Capital raised $400 million in cash from the hedge fund’s accounts.
FTX’s founder, Sam Bankman-Fried (SBF), has not yet been convicted in the alleged misappropriation of client funds. John Ray, who replaced SBF as the CEO, claims that improper fund transfers and poorly managed accounting books were the main reasons for the exchange’s collapse. Dietderich stated that “the situation has stabilized, and the dumpster fire is out.”
The Future of FTX Cryptocurrency Exchange
FTX is currently in talks with shareholders about restart options, and a final decision is expected by the end of the current quarter. However, the platform would need to raise significant capital to cover its obligations to all retail clients whose funds have been frozen. So far, only Japanese traders have been granted the ability to withdraw deposits due to strong regulations in that market. Dietderich believes securing external financing or selling some of the platform’s assets may be necessary to relaunch the exchange.
CySEC’s Position on FTX Europe
The Cyprus Securities and Exchange Commission (CySEC) recently announced that FTX EU LTD has initiated the process for customers to request their final account balances and withdraw fiat funds from segregated accounts. The market regulator is optimistic about a smooth and swift withdrawal process for affected customers. CySEC Chair Dr. George Theocharides expressed satisfaction with this positive development, which follows months of investor uncertainty and concern.
Moreover, CySEC has confirmed an extension of the suspension of FTX EU’s authorization until the end of September 2023. The Cyprus Investment Firm (CIF) license was first suspended in November 2022, following the bankruptcy filings of FTX.com, Alameda Research, and over 130 affiliates. The suspension has been extended multiple times, with the current extension pushing the suspension period even further.
