FTX Chief Executive John Jay Ray III said Thursday that he is open to reviving the bankrupt exchange if the move provides a way to return funds to customers and other creditors of the crypto trading venue.
“Everything is on the table,” Wray told the Wall Street Journal in an interview published Thursday. “We’re working with stakeholders who have identified what they believe is a viable business.”
Following this interview, the cryptocurrency exchange’s token FTT (FTT-USD), an increase of up to 35%. Since late October 2022, FTT has lost 90% of its value. At its peak in September 2021, FTT was trading at over $70 per token.
The defunct cryptocurrency exchange said Tuesday that it had identified $5.5 billion in liquid assets, but also said that based on current estimates, the company’s international and U.S. exchanges still face a “massive shortfall” of what trading venues owe customers .
The $5.5 billion included $1.7 billion in cash, $3.5 billion in encrypted assets and $300 million in securities, according to a court document containing the latest findings of the restructuring team.
On Wednesday, lawyers at Sullivan & Cromwell, the white shoe law firm representing FTX, told federal bankruptcy court that the restructuring team was also working to sell $4.6 billion in non-strategic illiquid investments.
While the exact shortfall between FTX’s assets and its liabilities to creditors has not been disclosed in the bankruptcy proceedings, the exchange’s founder and former CEO Sam Bankman-Fried claimed in two Substack posts that FTX US “was and is are solvent.”
Bankman-Fried, who is being held on bail at his parents’ Palo Alto home, also accused Sullivan & Cromwell of being “extremely misleading.”
Before FTX filed for bankruptcy, the company paid Sullivan & Cromwell $20.5 million for services related to the company’s legal counsel in various business transactions. “When I visit New York City, sometimes I work out of the S&C offices,” Bankman-Fried said last week.
The U.S. trustee for the case had previously expressed concern about potential conflicts of interest in its arguments to the judge for the appointment of an independent examiner.
Several U.S. senators also raised concerns that the law firm was unfit to represent FTX in bankruptcy, according to court records. One FTX creditor agreed with the conflict, likening the situation to “a fox blatantly trying to guard the chicken coop.”
Ray also said he was not initially informed about how FTX held its cash and cryptocurrencies, but was helped by FTX co-founder Gary Wang and Caroline Ellison, former CEO of affiliated trading firm Alameda Research.
Wang and Ellison both pleaded guilty to criminal charges related to how FTX allowed Alameda Research to spend billions of dollars in funds belonging to clients, according to a Justice Department complaint made public on Dec. 21.
“We don’t need to have a conversation with him,” Ray said of his communication with Bankman-Fried, whom he has kept at arm’s length. “He didn’t tell us anything that I didn’t know yet.”
Tomorrow, Friday, January. In federal bankruptcy court in Delaware on Feb. 20, Ray is set to testify on the topic of retaining Sullivan & Cromwell and other partners as debtor’s attorneys. Additionally, the court will consider whether the names of some FTX creditors should be sealed.
Click here for the latest cryptocurrency news, updates, values, prices and more related to Bitcoin, Ethereum, Dogecoin, DeFi and NFTs
Read the latest financial and business news from Yahoo Finance
Download the Yahoo Finance app apple or android
Follow Yahoo Finance Twitter, Facebook, instagram, activity board, LinkedInand youtube