FTX in discussions to revive global cryptocurrency exchange
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According to the Wall Street Journal, bankrupt FTX is actively reviving a major international cryptocurrency exchange, CEO John Ray III confirmed.
Ray stated that the company has begun a solicitation process to gauge potential partners’ interest in relaunching the FTX.com exchange.
Restart FTX
In discussion with The Wall Street Journal, CEO John Ray III provided statements to the news outlet, confirming the latest developments. Ray announced that the company had initiated actions to “urge interested parties to restart the FTX.com exchange.”
Sources familiar with the matter revealed that the bankrupt cryptocurrency firm was engaged in discussions with potential investors to explore the feasibility of backing a possible relaunch of the FTX.com platform.
Discussions included exploring different structures, such as joint initiatives, as mentioned in the report.
Is healing possible?
The announcement came after financial records revealed that a cryptocurrency trading firm, Alamada, which was initially thought to be independent of FTX, proved to be heavily dependent on FTX for its funding.
When clients tried to withdraw their deposits, FTX declared bankruptcy due to insufficient funds to meet demand. Bankruptcy lawyers noted that extravagant spending by executives, including Alameda’s access to a $65 billion line of credit from the stock exchange, contributed to the fiscal shortfall.
The report also highlights a document stating that in January 2021, as FTX prepared for an audit, a lawyer asked an outside law firm to create a “cash management” agreement, while providing an explanation as to why Alameda held “FTX cash… for the benefit of FTX clients.”
The Payment Agent Agreement is intended to create an appearance of naturalness and to hide any potential issues with the close relationship between the two companies during the audit process.
That was followed by the dramatic collapse of FTX, which filed for Chapter 11 bankruptcy protection in the US in November. The reason for the collapse of the company was a huge influx of funds from clients of the Sam Bankman-Fried Exchange, which severely affected FTX’s liquidity.
In addition, hopes for a potential bailout deal with rival exchange Binance have collapsed, leading to one of the most notable crashes in the cryptocurrency space in recent times. Currently, Sam Bankman-Fred’s fate before the court remains undetermined, with the latest news indicating that his bid to have criminal charges dismissed.