FTX Abandons Crypto Exchange Revival for User Payouts

FTX is throwing in the towel on its plans to revive the platform in favor of reimbursing its customers.

Three skeleton doctors are going to work on a coin.
Created by Kornelija Poderskytė from DailyCoin
  • FTX is not coming back to life anytime soon. 
  • The exchange is shifting its focus towards reimbursing its users. 
  • Despite the progress, customers are unhappy. 

Since declaring bankruptcy in November 2022, FTX has been relentlessly trying to make its creditors whole again. From scrapping SBF’s questionable deals to even working on reviving its defunct exchange, FTX has been hard at work trying to fix things. 

However, after over a year of concerted efforts, the defunct exchange finds itself at a crossroads, leading FTX to make a decisive shift in strategy– abandoning all plans for a revival and focusing on reimbursing its customers in full. 

FTX Scraps Exchange After Unsuccessful Bidding Run

The defunct cryptocurrency exchange FTX, formerly run by disgraced founder SBF, is throwing in the towel on its ambitious plans to revive the platform. Instead, the company has made a major shift in its strategy, pledging to focus exclusively on fully reimbursing its customers. 

FTX’s decision comes on the heels of unsuccessful negotiations with potential bidders and investors. According to FTX attorney Andy Dietderich, no one was willing to commit enough capital to rebuild the exchange. 

Underscoring the challenges of running and operating the exchange, Dietderich asserted: 

"FTX was an irresponsible sham created by a convicted felon. The costs and risks of creating a viable exchange from what Mr. Bankman-Fried left in a dumpster were simply too high."

When are FTX Customers Getting Paid?

Dietderich outlined that customers will be paid in full, with the reimbursement calculations pegged to prices from November 2022, when FTX filed for bankruptcy. According to CoinMarketCap, Bitcoin traded for $16,700 then. At press time, Bitcoin hovered around $42,000. 

Addressing customer complaints, Dietderich asserted that US bankruptcy was ‘very clear.’ He stated,

"I have no wiggle room on that. The Bankruptcy Code says what it says, and I am obligated to follow it."

Having recovered over $7 billion in assets to settle its debts to 9 million customers, the defunct exchange has secured agreements with various government regulators. These regulators have consented to await full customer repayment before pursuing claims totaling about $9 billion, as clarified by Dietderich.

Despite the progress, the exchange cautioned customers against anticipating swift reimbursement, citing the ongoing need to investigate the legitimacy of individual claims thoroughly.

On the Flipside

Why This Matters

FTX claimants have been waiting for over a year to become whole again. Shifting from reviving its exchange to a dedicated focus on customer repayment marks a significant and decisive step forward.

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This article is for information purposes only and should not be considered trading or investment advice. Nothing herein shall be construed as financial, legal, or tax advice. Trading forex, cryptocurrencies, and CFDs pose a considerable risk of loss.

Author
Insha Zia

Insha Zia is a senior journalist at DailyCoin covering crypto developments, especially in the Cardano ecosystem. With a Bachelor of Science in Computer Systems Engineering, he delivers high-quality articles with his technical background and expertise in data analysis and programming languages, aiming to educate and inform readers accurately, transparently, and engagingly. Insha believes education can drive mass adoption of the crypto space, and he is committed to giving DailyCoin readers a better understanding of the technology.