Bankrupt FTX is actively working to revive its major international cryptocurrency exchange, CEO John Ray III confirmed, according to The Wall Street Journal.
Ray said the company has launched a solicitation process to gauge interest from potential partners in relaunching the FTX.com exchange.
FTX Reboot
In discussions with The Wall Street Journal, CEO John Ray III issued a statement to the news outlet confirming the latest developments. Ray announced that the company has begun the process of “soliciting interested parties to restart the FTX.com exchange.”
The bankrupt cryptocurrency company has been in discussions with potential investors to explore the feasibility of supporting the relaunch of the FTX.com platform, according to people familiar with the matter.
The discussion involved exploring various structures, such as the joint initiative mentioned in the report.
Can it be restored?
The announcement comes after financial records revealed that cryptocurrency trading firm Alamada, initially thought to be independent of FTX, turned out to be heavily dependent on FTX for its funding.
When customers tried to withdraw their deposits, FTX declared bankruptcy due to insufficient funds to meet demand. Bankruptcy lawyers pointed out that lavish spending by executives, including Alamada’s $65 billion credit line from the exchange, led to the financial shortfall.
The report further highlights a document stating that in January 2021, as FTX was preparing for an audit, a lawyer asked an outside law firm to draw up a “cash management” agreement explaining why Alameda was holding “FTX cash… for the benefit of FTX customers.”
The Payment Agency Agreement is designed to create a semblance of normalcy and mask any potential problems during the audit involving the close relationship between the two companies.
FTX then collapsed dramatically and filed for Chapter 11 bankruptcy protection in November. The company’s downfall was triggered by a massive outflow of funds from customers of the Sam Bankman-Fried exchange, which severely affected FTX’s liquidity.
In addition, hopes of a potential rescue deal with rival exchange Binance fell through, leading to one of the most dramatic collapses in the cryptocurrency space in recent years. Currently, Sam Bankman-Fried’s fate in court remains undecided, with the latest news indicating that his request to dismiss criminal charges was rejected.