FTX may restart. That’s the crazy news for today, that one of the biggest crypto debacles could eventually turn itself around. The news has been greeted with positivity given that FTT – the native token of the now defunct crypto exchange – has risen by more than 35 percent at the time of writing.
Could FTX Become Operational Again?
Initially, the token was trading at about $1.83, though it has since risen to just over $2.50. John Ray III – the new CEO of the exchange who was also hired in the past to repair the mess left by Enron – explained in a recent interview:
Everything is on the table. If there is a path forward on that, then we will not only explore that, [but] we’ll do it.
In a recent hearing, John Ray announced FTX collapsed largely because funds were heavily mismanaged, and that “corporate controls” had failed at “every level.” In addition, he also alleged that Sam Bankman-Fried – the now disgraced head executive of FTX – commingled the funds of FTX and his other company Alameda Research by taking user money to pay off loans taken out by the latter enterprise. He also said SBF used customer monies to invest in Bahamian real estate.
Right now, his main goal is to work with creditors and try to recover as many funds as possible to ensure the right parties are paid back, and that those who have been wronged receive their dues. One of the ways to do this might involve reviving the company’s operations and having it serve non-U.S. customers. This, he says, would be more valuable and profitable than simply selling or liquidating assets from the existing platform. He commented:
There are stakeholders we’re working with who’ve identified what they see is a viable business.
FTX will likely go down as one of the biggest embarrassments of the crypto space. Once considered the golden exchange, it rose to prominence in 2019 and took only three years to become one of the world’s largest and most popular digital currency trading platforms. SBF was lauded as a genius for bringing such a company to its peak so quickly, but this reputation didn’t last.
One of the Biggest Embarrassments Ever
Problems began in mid-November when SBF complained of a liquidity crunch, saying his firm didn’t have enough money on hand to satisfy the high number of requests for withdrawals they were receiving. He approached his rival Binance about a possible buyout, but this failed to materialize, and it wasn’t long before the company collapsed into a smoking pile of bankruptcy and fraud.
This later resulted in the arrest of SBF, who was extradited back to the United States from the Bahamas. He awaits trial at his parents’ home in California and is trapped under the cloud of a $250 million bond.
