The tumultuous story of FTX, the international cryptocurrency exchange, is entering a new chapter. Following a controversial collapse in 2021, the company is gearing up to revive its flagship platform. It is a mammoth task indeed, considering the staggering $9 billion missing in customer funds and its tarnished reputation.
John J. Ray III, who took the helm during the company's bankruptcy proceedings in November, confirmed that FTX has commenced the process of rebooting the exchange. The team is now engaging with potential investors, exploring various structures, including joint ventures, for this purpose. A complete rebranding of FTX is also in the cards as part of this revival plan.
Notably, there have been discussions around possible compensation for existing customers who were affected by the crisis. They may be offered stakes in the reorganized entity, providing a silver lining for those who lost out.
Among potential backers, blockchain technology company Figure has expressed interest in supporting the FTX reboot. It previously attempted to acquire the rights to restart another failed crypto company, Celsius Network, but was outdone by a Fortress Investment Group-backed consortium.
One of the key hurdles is the recovery of the billions lost in customer funds. Unsurprisingly, this is proving to be a formidable challenge. An in-depth review of FTX's financial dealings unearthed questionable investment decisions, contributing to the enormous deficit in customer account balances.
Despite the obstacles, a successful reboot of FTX would be a more favorable outcome for its customers than a complete shutdown. Notably, one of the largest pools of assets that could be distributed to customers is FTT, FTX's in-house token. These tokens, which customers used to pay for transactions and trade on the platform, would lose their use cases and value without the exchange.