FTX 2.0 Would Be Worse Than Starting From Scratch, Kraken's Jesse Powell Says

The cofounder of legendary crypto exchange Kraken and top traders from the now-defunct FTX disagree on the prospects of the "FTX 2.0" initiative. Despite aggressive promotion by its team, FTX 2.0 has been met with notable skepticism for various reasons.

"Hopeless dream, malicious self promotion": Community slams FTX relaunch idea

The start of FTX 2.0 exchange as a way to allow the victims of the FTX collapse to be compensated will be "worse" for the industry than launching a new exchange from scratch. As such, the trademark auction is the best thing its trustees can do, Kraken co-founder Jesse Powell says.

FTX 2.0 would be worse than starting from scratch. No team, no tech, no licenses, no banking, tarnished brand. The trustee should just auction off the domain and trademark to the highest bidder. Anything beyond that is simply a fee extraction attack on delusional creditors. https://t.co/l7JirsbwjP

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— Jesse Powell (@jespow) August 2, 2023

As FTX 2.0 will go live without a team, technology, banking licenses and so on, its launch will be nothing but an "attack" on its community of creditors, Powell adds.

Veteran cryptocurrency trader who goes by @ThinkingUSD on Twitter shared similar thoughts with his 216,000 followers:

I don't think traders are going to want to deposit their collateral at Madoff enterprises. Or switch their Wifi to Enron Wifi. FTX 2.0 is a hopeless dream at best, and malicious self promotion at worst by certain influencers who have failed at everything else in crypto.

At the same time, the largest traders of FTX 1.0 are optimistic about the potential spin-off launch. Top trader @HighStakesCap, who claims to be once #1 of FTX by PnL, highlights that the majority of traders are "OK" with the idea of FTX 2.0.

His colleague Alex Wice is also sure that "everyone is hopeful" about FTX 2.0.

FTX 2.0 on its way to launch

At the same time, all of these speakers doubt the activities of liquidation committee since liquidators' compensation rates look too high for victims of the FTX collapse.

Some of them are yet to receive compensation for their losses on Cryptopia and Mt. Gox, now-defunct cryptocurrency services.

FTX 2.0 is an initiative of a "committee," a group of former FTX creditors and its interim CEO John Ray III. Per some estimations, the new iteration of FTX might be launched as soon as this year.