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FTX seems to be eyeing a new source of income. Amidst the organizational restructuring following the company’s bankruptcy, plans are in place to generate billions of dollars solely from the lawsuits and legal claim processes they are involved in. According to an opinion shared by The Wall Street Journal, the troubled crypto exchange currently has more than a dozen cases.
Will FTX Make a Comeback?
The crypto exchange FTX, which made headlines in the past years and then went bankrupt, is currently grappling with an $8 billion fraud case that caused the loss of most of its assets.
However, exchange lawyers plan to recover all the spent money by bringing up the allegations directed at them in the case. If the current legal battle continues and the company somehow emerges as the winner, this could mean billions of dollars in recovery for FTX.
The report published by WSJ also indicated that, in addition to the current and ongoing legal process, the crypto exchange is expected to occupy the agenda with even more cases in 2024.
Many analysts, including Alan R. Rosenberg, a partner at Markowitz Ringel Trusty & Hartog, suggest that the legal battle process for FTX will take much longer, possibly even outlasting other crypto bankruptcies like Celsius and BlockFi.
This is due to the multiple claims or avoidance actions FTX has faced, trying to recover payments made in the weeks and months before its bankruptcy.
FTX has already settled its complaints related to Genesis, a significant creditor of the FTX-affiliated trading firm Alameda Research, and its international creditors. As part of the case, Genesis will make a payment of $175 million to FTX.
The Future of FTX
Sam Bankman-Fried was found guilty of fraud charges after approximately a month-long struggle.
According to Reuters, the trial took place almost a year after the distressed crypto exchange’s rapid collapse led to a bankruptcy filing, which put financial markets under pressure and nearly wiped out SBF’s personal fortune of about $26 billion.
If the company’s ongoing cases resolve in FTX’s favor, this could not only mean the recovery of billions of dollars. It could also signify a potential recovery for FTX, which may attract investors.
