8 months ago
The collapsed cryptocurrency speech FTX volition not beryllium proceeding with efforts to resume operations due to the fact that nary of the prospective suitors has pledged to put the needed capital, the company’s lawyer has said. A U.S. Bankruptcy Court justice has said FTX’s connection to reimburse users based connected November 2022 is the close mentation of the law.
None of FTX’s Suitors Wants to Put successful the Required Capital
An lawyer for the collapsed cryptocurrency speech FTX reportedly told a bankruptcy tribunal that the institution has abandoned efforts to resume operations due to the fact that nary of the prospective investors is consenting to enactment successful the required superior to marque this happen. According to Andy Dietderich, the lawyer who represented FTX successful the bankruptcy court, the exchange’s unsuccessful negotiations with imaginable suitors showed that jailed laminitis Sam Bankman Fried (SBF) ne'er intended for FTX to run arsenic a viable business.
Dietderich argued that the costs and risks associated with reviving FTX acold outweighed immoderate payment that comes with immoderate specified revival of the crypto exchange.
“FTX was an irresponsible sham created by a convicted felon. The costs and risks of creating a viable speech from what Mr. Bankman-Fried near successful a dumpster were simply excessively high,” Dietderich said connected Jan.31.
FTX’s Controversial Reimbursement Proposal
Rather than restarting the business, FTX volition present absorption connected generating gross from the merchantability of its assets. The funds raised volition beryllium utilized to reimburse FTX users whose assets were locked successful erstwhile the crypto speech filed for bankruptcy successful precocious 2022. At the clip of FTX’s abrupt collapse, the USD worth of galore crypto assets, including Bitcoin (BTC), was astatine its lowest successful that year. However, conscionable implicit a twelvemonth aft FTX’s collapse, the prices of astir crypto assets deed their highest successful astir 2 years, with BTC having grown by 160% successful 2023 alone.
Despite Bitcoin’s emergence from conscionable nether $17,000 successful November 2022 to $42,000 by Jan. 31, 2023, the collapsed cryptocurrency firm’s rescue squad has projected to basal the reimbursements connected November 2022 prices. This determination has angered users who consciousness short-changed.
However, U.S. Bankruptcy Judge John Dorsey dismissed the users’ complaints successful his ruling. He suggested that FTX had correctly interpreted the bankruptcy law, which intelligibly states that debts should beryllium repaid based connected their worth astatine the clip of a bankruptcy filing.
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