FTX granted approval to Sell While Lawyers Lay Groundwork to Reopen Exchange

FTX, the global cryptocurrency exchange, has been given the go-ahead by a Swiss court to explore selling its distressed European arm, according to debtors. Meanwhile, bankruptcy attorneys for FTX claim that the exchange could be relaunched as early as 2024. During a hearing on Wednesday in Delaware, FTX's legal counsel stated that the exchange had recovered $7.3 billion in assets and could now start to consider a reboot. The parent company of FTX, also named FTX, has a US arm known as FTX.US, although the $7.3 billion figure pertains to the exchange as a whole.

Depending on available funding, the exchange could look to reopen as soon as next year, according to FTX's legal counsel during the hearing. However, assets that have been recovered so far have been frozen, pending court approval of FTX's creditor payout plan, which could be a lengthy process. Reopening FTX's trading doors could be part of the plan, the legal counsel said during the hearing. Details of the court proceeding were reported by Reuters.

FTX's legal team has been laying the groundwork to potentially relaunch the exchange, as shown by bankruptcy court filings. The exchange's February legal bills, which were released as part of its compensation report filings this week, show that debtors paid out almost $30 million to six separate law firms in a month. In February, Sullivan & Cromwell, one of the law firms, received $13.5 million from FTX for various tasks, including exploring "long-term options" for the exchange.

FTX filed for Chapter 11 bankruptcy in November 2022. In January, the exchange's new CEO, John Ray, said the exchange could be restarted at some point. Wednesday's hearing followed a Swiss court granting FTX Europe AG approval to explore selling the European arm of the exchange. The moratorium allows the exchange to investigate alternative options for its business, including a potential sale, as per Swiss law. FTX Europe AG is still listed as a debtor in the exchange's US bankruptcy proceedings. Swiss courts noted that fact when granting the moratorium, meaning that the entity will have to abide by the creditor repayment plan once approved.