FTX in talks with three bidders to restart cryptocurrency exchange

FTX Trading Ltd. is considering proposals from three bidders to restart trading at the company, once one of the world’s largest cryptocurrency exchanges, before it collapsed amid fraud allegations.

The company will make a decision by mid-December on how to proceed, Kevin M. Cofsky of Perella Weinberg Partners, an investment banker for the company, said Tuesday at a court hearing in Wilmington, Delaware. Cofsky said FTX is negotiating with investors on the details of a potentially binding offer.

Cofsky told U.S. Bankruptcy Judge John Dorsey that options include selling the entire exchange, including its list of more than 9 million customers, or bringing in a partner to help restart the exchange. He said FTX is also considering restarting the trading platform on its own.

“We are in contact with multiple parties every day,” Cofsky said, without naming the bidders.

FTX has been struggling to raise funds to repay creditors since filing for bankruptcy last year. According to court documents, FTX administrators have so far recovered about $7 billion in assets, including $3.4 billion in cryptocurrencies.

Company attorney Andrew Dietderich said in court that FTX and its main group of creditors have reached a preliminary resolution to some of the thorniest disputes in the case, which will allow the company to submit a detailed payment plan in December.

In bankruptcy, such plans typically provide creditors with estimates of how much they expect to recover, expressed as a percentage. But Dietderich said FTX doesn’t currently know what customers will get. The recovery percentage will depend in part on how much value FTX can extract from a potential sale or restart of the exchange.

FTX founder Sam Bankman-Fried resigned as CEO last year after the company shut down its trading platform in response to financial turmoil. Bankman-Fried is currently on trial in New York on charges that he transferred FTX customer funds to another company he controlled. The money was allegedly used for high-risk trading, political donations, and the purchase of expensive real estate before both companies collapsed.