FTX reborn after crash
2023.01.20 04:01
FTX reborn after crash
By Tiffany Smith
Budrigannews.com – Several crypto industry commentators have expressed skepticism regarding the plans of FTX CEO John Ray to possibly relaunch the cryptocurrency exchange. They cited trust issues and customer treatment that was deemed “second-class” as some of the reasons why users might not “feel safe to go back.”
Sam Bankman-Fried, the former CEO of FTX, posted a tweet on January 20 praising John Ray for considering a relaunch of the exchange, arguing that this is the best option for its customers.
After months of repressing such efforts, I’m glad Mr. Ray is finally giving the exchange a chance, even if it’s just a gimmick!
I’m still waiting for him to finally acknowledge that FTX US is solvent and refund customers’ funds.
This came after John Ray revealed to the Wall Street Journal on January 19 that he was thinking about reviving the cryptocurrency exchange as part of his efforts to reunite users.
Ray said that stakeholders have shown interest in the possibility of the platform returning, considering the exchange to be a “viable business,” despite the fact that top executives have been accused of criminal misconduct.
Leigh Travers, CEO of Binance Australia, told Cointelegraph that he thinks it will be hard for FTX to get a license again, especially as the industry enters the new year with more regulations and government oversight.
Travers added that users of FTX have switched to “other platforms, like Binance” since the closure. He wondered if those users would “feel safe to go back.”
He discussed the questionable governance and controls of FTX, with administrators disclosing specifics about certain clients receiving “preferential treatment,” such as “back door switches.” Travers remarked:
“How can users return to a platform that treated some customers as second-class?”
Given the reputational damage and lack of trust, digital assets lawyer Liam Hennessy, partner at Australian law firm Gadens, believes that any customer or investor would “come near them again” for FTX.
Hennessy was also skeptical about whether FTX would ever receive a license again, describing it as “one big question mark” that depends entirely on jurisdictions.
The lawyer is of the opinion that obtaining license approval for the exchange will be easier in some offshore jurisdictions, but it will be pointless if its users do not intend to return.
“It will be a serious challenge to jump through the hoops the major jurisdictions will set such as the US, UK, and Australia.”
In the meantime, senior law lecturer Aaron Lane from the Blockchain Innovation Hub at RMIT University stated to Cointelegraph that it is “not surprising” that FTX would consider reviving the exchange business, noting that the purpose of the Chapter 11 process is to enable the company to propose a plan to run the business and pay back the creditors “over time with the court’s approval.”
He is of the opinion that “the onus will be on FTX,” or a creditor who files a competing plan, to demonstrate that creditors will receive a “better result” under the revival plan as opposed to FTX’s assets being liquidated.
Lane, on the other hand, questioned whether customers will ever trust FTX again, stating that it could happen that a different business launching a new exchange “purposes those assets” rather than creating a brand-new interface.
