It’s been almost impossible to have avoided hearing about the FTX debacle that unraveled late in 2022, following some exceptionally poor fund handling by its former CEO, Sam Bankman-Fried. As Bankruptcy hearings and processes continue to run, there have been rumors that FTX could make a comeback, a comeback that several big names in the crypto world appear to support.
Speaking in an interview with the Wall Street Journal, New FTX CEO John Ray III stated that he was open to the idea of restarting the disgraced exchange. On the back of this interview, FTT, FTX’s exchange token, started pumping, rising to just over $2.50 from lows of $0.93 in January 2023. However, as time has passed and the dust has settled from the announcement, the price of FTT has calmed down to a more appropriate level, suggesting that the upwards movement was likely hopeful degens trying to get in nice and cheap, just in case FTX springs to life.
Should FTX Reboot?
FTX was once regarded as one of the best exchanges in the world, and its founder and CEO, Sam Bankman-Fried was seen as a crypto demigod. Everything SBF touched was gold. He truly was crypto’s golden child. But the catastrophic failure to comply with any real regulations, causing its balance sheet to implode after just 2 Tweets from Binance CEO Changpeng Zhou, is it wise to relight the FTX fire?
While the FTX platform was user-friendly, intuitive, and sleek, crypto traders would have to put up with a lot of baggage. At a time when other exchanges are receiving fines left, right, and center for rather mundane offences, allowing FTX, the exchange that sank with billions of dollars of customer funds would make a mockery of the entire centralized exchange world.
If FTX does rise from the Ohio train wreck esq fallout and once again start trading, it would be heavily regulated and have a ton of oversight from regulators that other exchanges might not currently have, potentially making it a slightly more “safer” choice in the long run.
Who is John Ray III?
For those of you that might be relatively “new” to the world of failed companies, John Ray III is an American attorney and CEO that specializes in recovering funds from failed corporations. He’s the mastermind behind recovering investor funds from major corporations including the likes of Fruit of the Loom, Enron, Nortel, and Residential Capital. He has an incredible track record when it comes to returning funds to investors, but this doesn’t mean he’s any good at restarting companies OR getting funds back for the users of these companies.
The long and short of it is rather simple. In an ideal world FTX US could come back online and only offer a small range of services to US-based clients, under the watchful eye of the US Securities and Exchange Commission. But the reality is more likely to be that the technology and assets will get sold off so that investors can get their money back, leaving platform users that lost their funds high and dry.
Don’t put too much stock in getting your FTX funds back. There’s a good chance that’s gone forever!