FTX will not relaunch exchange, bankruptcy lawyer says

The latest FTX news is that the bankrupt crypto exchange will not be re-starting. According to a Reuters report on Wednesday, the FTX team has decided to liquidate all assets and reimburse the crypto exchange’s customers.

An FTX attorney revealed the new approach on Wednesday, Reuters reported.

Costs and risks of a restart scares bidders

According to the attorney, FTX had looked to reboot following engagements with various bidders over the past several months. However, these efforts have now been abandoned as no bidder is willing to invest the kind of money required to restart the exchange.

With the costs and risks involved making a rebuild unfeasible, FTX will now look to return its users’ money, Andy Dietderich told the bankruptcy court in Delaware.

Will customers get value for their assets?

FTX’s flip from plans to restart the platform to complete liquidation of assets comes as the crypto market heaves amid some sell-off pressure related to the dumping of FTX assets. While customers get the "full" repayment, its expected to be at values that reflect prices when the exchange collapsed.

FTX founder found guilty

FTX filed for bankruptcy in November 2022, with its implosion amid massive losses leading to a broader market downturn that sent crypto prices plummeting. The exchange’s founder and former CEO Sam Bankman-Fried, was later found guilty of all charges against him, including fraud.

In recent weeks, FTX has sold off massive chunks of its crypto holdings, with a $1 billion dump of shares of Grayscale’s GBTC one of the reasons Bitcoin price dropped sharply following the approval of spot Bitcoin ETFs in the US.

FTX token's price

In the wake of today's news, the native FTX token FTT rose sharply to trade above $2.99. However, the token's value dumped within an hour and changed hands around $2.21 at the time of writing. According to CoinGecko data, the coin's price was down 18% in the past 24 hours and 28% in the past 30 days.