FTX Attracts Multiple Bidders for Relaunch as Customers Await Hope
Bankrupt cryptocurrency exchange FTX has attracted several bids for a potential company restart, according to investment banker Kevin Cofsky of Perella Weinberg Partners.
Cofsky testified at a Tuesday court hearing that FTX has narrowed down bidders interested in acquiring or investing in the collapsed exchange. Key points:
- At least three bidders remain under consideration for purchasing FTX, which handled tens of billions in daily trading volume at its peak.
- A decision on a proposed bid could come by the mid-December court deadline for submitting restart plans. Customer data access could prove valuable to bidders.
- Cofsky expressed optimism that FTX will have a reorganization plan, partnership agreement, or stalking horse bidder lined up by December 16.
- FTX founder Sam Bankman-Fried has floated a proposal to return 90% of recoverable assets to creditors.
Cofsky’s testimony helped keep FTX’s millions of customers private for now, as potential buyers likely view it as an asset. His comments signal that FTX may have options to resume operations under new ownership.
However, major uncertainties hang over the bankruptcy process given FTX’s spectacular collapse. The exchange imploded amid liquidity issues and allegations of misused customer funds.
What happened to FTX?
FTX was a leading crypto exchange founded in 2019 that reached a valuation of $32 billion. However, the exchange faced a liquidity crisis in November 2022 and unsuccessfully sought bailout funds.
After rival Binance pulled out of buying FTX assets, the exchange filed for bankruptcy on November 11. The company’s CEO also stepped down. In the aftermath, hundreds of millions of tokens were reportedly stolen in a hack.
FTX’s collapse dealt a major blow to already cautious crypto investors concerned about security. The exchange’s customers face uncertainty around recovering their assets, which could spur legal action. Regulators are already increasing crypto oversight, which is evident from the intense scrutiny of the industry by the SEC and CFTC.
