The new chief executive of bankrupt crypto exchange FTX, John Ray, is considering reviving the platform. In an interview with the Wall Street Journal, Ray said he has established a task force to examine the possibility of restarting FTX.com to “recover more value” for people who lost money. The exchange, which was valued at $32 billion a year ago, filed for bankruptcy protection in November and is estimated to have $8 billion worth of missing funds. The former CEO, Sam Bankman-Fried, has been accused of defrauding customers and investors to pay debts incurred by his crypto-focused hedge fund, Alameda Research. He has pleaded not guilty to fraud charges.
Ray is exploring the idea of resurrecting the platform instead of simply liquidating assets or selling the platform, according to the WSJ report. He said that he had never “seen such a complete failure of corporate controls” in his career, which includes overseeing the bankruptcy of US energy giant Enron. The collapse of the exchange was one of the key events in what has been dubbed a “crypto winter” for firms. The first big shock came last May with the collapse of two tokens – Terra Luna and TerraUSD – owned by Terraform Labs.
The fall led to $400 billion being wiped from the value of many other cryptocurrencies, including Bitcoin. By September, Interpol issued a red notice to law enforcement agencies for the arrest of Terra founder Do Kwon. In November, the disruption to the crypto market hit another level, with the collapse of FTX – one of the biggest exchanges and the entry point for millions of people. It was seen as one of the most trusted platforms, but collapsed into bankruptcy in days after its finances were revealed to be unstable.
FTX’s founder, Mr. Bankman-Fried, told the BBC in his last interview before his arrest: “I don’t think I tried to do anything wrong.” In December, the 30-year-old was extradited from the Bahamas, where FTX was based, back to the US where he formally pleaded not guilty to charges of defrauding customers and investors. He was released on $250 million bail, denying the allegations.
The future of customer funds remains uncertain, and it is not clear what steps the taskforce set up by Ray will take to recover the lost funds. However, with Ray’s experience in overseeing bankruptcy cases, he may be able to come up with a plan to revive the platform and return value to the affected customers and investors. It will be interesting to see how the situation develops in the coming weeks and months.
