FTXs Dr. Frankenstein Attempts to Revive Dead Crypto Exchange

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Besides Terra, FTX is perhaps the biggest synonym for failure in the crypto industry. It’s a three-letter word dragged so far in the mud that it’s hard to distinguish it from a cow patty. Still, enough people working at the exchange think people would be interested in a reboot. So much so that the new CEO of FTX has been actively working on a so-called 2.0.

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As first reported by Decrypt, documents released Monday by FTX in its pending bankruptcy reveal that current FTX CEO John Ray III spent several hours working on a potential restart of the exchange. On April 17, Ray reportedly spent nearly an hour and a half going through the steps needed to reboot FTX, while on the 19th of the same month, he took less than an hour to review and finalize the reboot. 2.0 exchange material to distribute. The final item in April was a review and comment on the Bidders List 2.0.

Some of those items mention companies, like investment bank Perella Weinberg Partners LP that provided steps in a potential restart plan. Ray also spoke with cybersecurity firm Sygnia for the fortification of exchanges. Who would be really interested in bringing back this Frankenstein monster? Well, Bloomberg reported last month that venture capitalists from Tribe Capital met with FTX’s creditors’ committee in January to suggest a fundraising campaign. Tribe had previously invested in FTX, and any buyout would apparently attempt to retain the name.

For each of these items, Ray was charging the company thousands of dollars an hour for his efforts. He billed a total of $290,160 for his work in April alone. Summarizing his work, Ray said he spent time implementing several elements of the exchange such as cybersecurity and cash management that did not exist, or did not exist to an appropriate degree, prior to the appointment of Mr. Rays.

Ray previously mentioned in January that stakeholders were pressuring him to restart the exchange, and at least at the time he was supportive of the idea. He told the Wall Street Journal at the time if there’s a way forward on this, so we’re not just going to explore that, well do it. Last month, an attorney for the bankrupt crypto exchange, Andy Dietderich, said that the exchange’s management was considering restarting the bankrupt business as the situation had stabilized. FTX will have to decide in the second quarter if a full restart is possible, according to its presentation.

Ray previously called FTX a complete failure of corporate controls and reported that former FTX CEO Sam Bankman-Fried and his executive cronies were such bad managers they would joke about losing millions of dollars. at a time. FTX has struggled to recover billions in client funds that had gone missing, but Dietderich said in April the company had recovered $7.3 billion of the missing $9 billion, in part due to rising fees. bitcoin price.

In the meantime, Bankman-Frieds’ name is just as smeared as his former exchange. He faces more than a dozen criminal charges alleging everything from fraud to campaign finance violations to bribery of Chinese officials. But beyond that, who wouldn’t want to partner with the big old FTX brand?

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