Bankrupt FTX Initiates Early Talks on Crypto Exchange Relaunch: Report

Bankrupt FTX Initiates Early Talks on Crypto Exchange Relaunch: Report

The bankrupt
digital asset exchange, FTX has kicked off initial discussions with potential
investors as part of its efforts towards relaunching the cryptocurrency trading
platform, Wall Street Journal reported on Wednesday, citing John J. Ray III,
the exchange’s new Chief Executive Officer.

FTX
Eyes Reboot

According
to the American publication, FTX is considering floating a rebranded entity
operated through various structures, such as a joint venture. Insider
sources told the outlet that the exchange management was discussing possible
compensation for certain existing customers, which may include the form of stakes as a reorganized entity.

Figure, a California-based blockchain technology firm, has been quick off the mark to express an interest in the rebooted business. FTX also expects other
interested investors to state their interest this week.

In January,
Ray III had said he was looking into the possibility of reviving the crypto
exchange. The executive, who took over the reins of the exchange in November, said certain customers lauded the
platform’s technology and suggested a reboot.

As it is well known throughout the industry, FTX
crumbled last year after news emerged that the exchange’s customer
assets were being used to prop up its sister quantitative trading firm, Alameda
Research. The development triggered a liquidity crisis that forced FTX to file for bankruptcy
protection in
Delaware, United States.

FTX under
John J. Ray III

Ray III has previously criticised how Bankman-Fried conducted the operations of FTX and its affiliates, calling it a ‘complete failure of
corporate controls’. He faulted the governance structure, cash and human resources
management, disbursement controls, record-keeping of digital asset custody,
investment activities and decision-making of the FTX Group under the leadership of the former CEO.

Since
taking over the affairs of the bankrupt firm, FTX, Ray III has made efforts to recover the assets
of the exchange and its
affiliates in a bid to ensure successful reorganization of the business. These efforts have led to the sale of FTX’s crypto derivatives platform, LedgerX, and the proposed sale of Mystern Labs
for $95
million, among others.

Meanwhile, the bankruptcy team in charge of FTX disclosed on Monday that it has recovered $7 billion out of the
$8.7 billion owed to FTX customers. On the other hand, Bankman-Fried, who was arrested in the Bahamas last year and later extradited to the United
States, continues with his legal team to resist US prosecutors ahead of his first trial billed
for October 2023.

Revolut slashes crypto fees; BitPay adds new payment options; read today’s news nuggets.

This article was written by Solomon Oladipupo at www.financemagnates.com.

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