FTX, the cryptocurrency firm entangled in legal troubles since its collapse in 2022, is strategically selling its digital assets and accumulating cash to settle debts and repay customers whose accounts have been frozen. The company’s major affiliates, including FTX Trading Ltd. and Alameda Research LLC, have substantially increased the group’s cash reserves to $4.4 billion by the end of 2023, aiming to address financial challenges arising from its collapse. FTX has also engaged in Bitcoin derivative trades to hedge exposure and explore potential avenues for restarting the exchange.
Despite an increase in FTX’s cash holdings, the company acknowledges that full customer repayment may not be achievable. The rise in the value of customer accounts since the platform’s unraveling has prompted bankruptcy advisers to track down assets and negotiate deals beneficial to customers. Notably, lawsuits have been filed against former associates and other crypto firms that withdrew funds from FTX before the Chapter 11 filing.
The trading prices of customer claims, valued at over $1 million, have seen an increase from 38 cents on the dollar in October to 73 cents on the dollar as of the latest data. However, challenges persist, as FTX.com customers contest a proposal that pegs the value of their digital assets at the time of the bankruptcy filing, potentially causing them to miss out on subsequent market rallies.
The company remains tight-lipped about its ongoing financial maneuvers, leaving customers and industry observers eager to see how FTX navigates its path to recovery amidst the complex legal landscape.
