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.

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