FTX CEO Proposes Exchange Restart Strategy in Compensation Report

FTX CEO Proposes Exchange Restart Strategy in Compensation Report

Plans to restart bankrupt cryptocurrency exchange FTX have been confirmed in a new staffing and compensation report filed with the United States Bankruptcy Court, with potential plans for FTX 2.0 and a divided crypto community speculating on the exchange’s viability.

Intends to restart the bankrupt digital currency exchange FTX Trading Ltd have been confirmed in a new staffing and compensation report filed with the  United States Bankruptcy Court for the District of Delaware on Monday.

The document shows that acting CEO John J. Ray III spent hours engaging in plenty of activities to devise a recovery strategy for the troubled cryptocurrency exchange in April.

Plans for FTX Trading Ltd 2.0 in the Works

The CEO 1st disclosed that reviving FTX Trading Ltd was on the table in January, two months after the exchange collapsed owing to a severe liquidity crunch. Ray, whose duty is ensuring that FTX’s creditors receive as much compensation as possible, pointed out that he would consider rebooting or liquidating the exchange’s assets, which would generate more value.

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The previous  30 days, after FTX Trading Ltd recovered approximately $7.3 Billion in distributable assets, the exchange’s attorney Andy Dietderich revealed that the legal team would discuss subsequent steps for a potential reboot and intends to file a preliminary reorganization strategy in July. He also mentioned that confirmation of the strategy would likely take place in Q2 2024.

Several  days thereafter, reports resurfaced that San Francisco-based deal financial resources company Tribe Financial resources was seeing as a $250 Million fundraising campaign to assist FTX Trading Ltd restart its operations. Tribe reportedly plans to lead the round with $100 Million from itself and limited partners. The firm’s CEO, Arjun Sethi, has already met with FTX’s committee of unsecured creditors to discuss the arrangement.

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The most recent court filing has intimated at plans for the exchange’s restart, as Ray spent greater than 6 hours tending to related matters in the past 30 days. Several activities include reviewing steps and materials and commenting on the FTX Trading Ltd 2.0 bidder list. The exchange’s reorganization strategy would involve a bidding process.

A Divided Cryptocurrency Community

It is worth keeping in mind that reports about FTX’s recovery are according to hypothetical statements and speculation drawn from internal information, as neither Ray nor the committee of unsecured creditors has released a concrete strategy for the initiative.

Although while some members of the cryptocurrency community believe FTX Trading Ltd 2.0 would be the better path to recovery for all involved parties, others doubt the plan’s viability. Clients who worked with the company before its demise said it performed poorly owing to high latency, bugs in the app  programming interface (API) for traders, and coding difficulties.

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