- July 1, 2023
- Posted by: [email protected]
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In a move towards potential revival, FTX, a bankrupt cryptocurrency exchange, is undergoing discussions with interested parties to finance its relaunch. According to The Wall Street Journal on June 28, the company’s restructuring chief, John Ray, has begun the process of seeking new investors for the relaunch of the FTX.com exchange.
Sources familiar with the matter have disclosed that FTX has been engaged in talks with various investors regarding the financing of this potential relaunch. Among the parties displaying interest is Figure, a blockchain lending company. Prospective bidders have been given until the end of the week to submit Letters of intent, outlining the terms and conditions of their participation.
Significantly, it has been suggested that the reorganized crypto exchange may offer current FTX creditors a stake in the venture, along with other forms of compensation. Moreover, FTX intends to rebrand itself with a different name rather than using “FTX 2.0” or any variation of its original name.
The objective of the reboot, as perceived by Ray and the FTX team, is to maximize the repayment to creditors, providing them with the best possible outcome. FTX’s legal team had previously stated in April that the launch of the new exchange is expected to be completed sometime in the second quarter of 2024.
According to a report on the recovery process released on June 26, FTX still has a substantial deficit of about $2 billion. Allegations of customer asset misuse by key figures in FTX’s leadership have hindered efforts to retrieve these lost funds. Daniel Friedberg, a former FTX regulatory officer, has been named in multiple legal cases and was sued by the company on June 27 for allegedly engaging in illegal procedures such as providing “hush money” to possible whistleblowers and sanctioning fraudulent transfers and loans.
The report on the missing funds also highlighted alleged investments in venture capital firms, a $243 million Bahamian real estate portfolio, and numerous donations to non-profit organizations.
FTX is actively pursuing a potential reboot of its operations by engaging with interested investors. The company aims to restructure itself, potentially offering current creditors a stake in the reorganized exchange. However, the path to recovery is obstructed by substantial financial deficits and allegations of misconduct by certain individuals associated with FTX.
