Kraken founder Jesse Powell expresses concern about the possible FTX relaunch envisaged by its new management. They propose to reopen FTX.com with the support of investors, including aggrieved customers, who would receive equity stakes. But according to Kraken’s former CEO, FTX’s image is now too tarnished.
Jesse Powell criticizes possible FTX relaunch
Jesse Powell, founder of cryptocurrency exchange Kraken, has voiced his concerns about a hypothetical FTX relaunch as envisaged by the exchange’s new management. Indeed, just a few days ago, the latter proposed a reopening of FTX.com with the support of investors, including the exchange’s aggrieved customers, who would be rewarded with equity stakes.
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
– Jesse Powell (@jespow) August 2, 2023
FTX 2.0 would be worse than starting from scratch. No team, no technology, no licenses, no bank, tarnished brand. The trustee simply has to auction off the domain and brand to the highest bidder. Anything beyond that is simply a fee extraction attack against delusional creditors. “
To this, a creditor group gathered under the name “FTX 2.0 Coalition” replied “maybe FTX committee members aren’t delusional, but just have different incentives than a Kraken founder,” referring to a tweet indicating that FTX’s largest creditors had investment banks, restructuring or consulting specialists at their disposal.
Jesse Powell, however, clarified his point of view:
“A group of lawyers isn’t going to build a secure, high-performance cryptographic exchange. Competent people have better offers. Replicating the competitive advantages offered by FTX may not even be possible for a legitimate operation. Active traders switched to other exchanges months ago. “
Of course, FTX’s potential relaunch would mean new competition for Kraken, but it’s clear that FTX’s image has been sullied for many investors, and even with new management, there’s no guarantee of success.
FTX’s relaunch not just yet
The official creditors’ committee has been critical of recent decisions by FTX’s new management, accusing it in particular of failing to involve them in drawing up the restructuring plan. And this is no mean feat, since creditors will have to decide on the future of the company, and this could have the effect of delaying the repayment process for aggrieved customers.
“What was supposed to be a watershed moment for these bankruptcy cases – the filing of a reorganization plan preceded by solid, good-faith negotiation and collaboration – is anything but. […] The committee is extremely disappointed that the debtors have not engaged with it on these issues and have not yet discussed them with its members to appreciate their importance. “
The creditors’ committee has indicated that if it is not further involved in the process, it may decide to take legal action against FTX. Among other things, it is calling for the exchange to be relaunched under the control of “qualified parties” and for a recovery token to be set up to participate in the reimbursement of aggrieved customers.
