At the end of 2022, the crypto exchange FTX went bankrupt. It has now been more than a year since FTX co-founder Sam Bankman-Fried (SBF) was convicted and the industry appears to have slowly recovered. But the bankruptcy is still not resolved and it could take a long time. According to an experienced lawyer, this would be the case even could take years.
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The misery at FTX is far from over?
In an interview with The Block, Alan R. Rosenberg, partner at Markowitz Ringel Trusty & Hartog, explains that the matter may not be over yet. This American law firm has, among other things, experience with bankruptcies. Rosenberg emphasizes that FTX has used a chargeback mechanism, through which FTX wants to recover millions of dollars from many customers:
“In some cases, these (FTX claims) are likely to be very significant. The organizations whose money FTX wants back are fully capable of defending themselves. It’s entirely possible that this will continue for a very long time.”
In addition, there are also creditors at FTX itself who are demanding money back from FTX. This amount is estimated at $8 billion, although it emerged last year that the exact amount is not entirely clear. It seems that a lot went wrong in accounting terms before FTX went bankrupt.
Several crypto companies have gone bankrupt in 2022. Celsius and BlockFi, for example, suffered similar bankruptcies to FTX. BlockFi trading However, it emerged from bankruptcy last October and Celsius announced a relaunch as a Bitcoin miner in November.
But FTX is no exception. The bankruptcy of the crypto exchange Mt. Gox, for example, is not over yet. Some customers only received their money back last December, even though the bankruptcy took place in 2014.
The costs at FTX are still high
The judge has already ruled against FTX co-founder Sam Bankman-Fried. There will be no follow-up proceedings. The crypto industry was somewhat shocked by this as some important questions still remain unanswered.
What makes a difference is that SBF can no longer put further strain on FTX's budget, but FTX's capital continues to shrink. The new board, which has to contribute to the return of capital, also demands high costs.
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