This is unexpected news: John Ray III, who took over the reins of FTX following its bankruptcy last November, is evaluating the possibility of relaunching the FTX.com group. He says the question is how best to reimburse damaged customers between this and the sale of the company’s subsidiaries. FTT’s share price gained more than 40% in the aftermath.
FTX’s comeback a possibility
John J. Ray III, FTX’s new CEO since the exchange’s bankruptcy and Sam Bankman-Fried’s retirement, says he has set up a task force dedicated to relaunching the FTX.com group. He says that while some individuals in key positions in the company may have acted improperly, the fact remains that FTX has potential.
Indeed, before the company’s mismanagement was exposed, FTX was the second largest cryptocurrency exchange in the world, and was widely regarded as the main rival to the giant Binance.
John Ray III has some expertise in restructuring bankrupt companies, having himself been actively involved in paying off the creditors of energy giant Enron Corp in the early 2000s. The amounts to be repaid then reached 10 figures, just like the sum of FTX’s outstanding debts today, although the precise amount of the latter remains unknown to this day.
However, the latest news is that the sums collected so far by the exchange’s new management have shed some light on this gloomy picture. Indeed, at the beginning of the month, FTX was reporting more than $5 billion in recovered assets, far more than originally envisaged.
Repayment of injured customers is the goal
According to FTX’s new CEO, the decisive factor in this decision will be the reimbursement of the exchange’s injured customers. Thus, the question will be which will generate more financial value between a re-launch of FTX or the sale of the group and its subsidiaries.
Everything is on the table. If there is a way forward on this, then we won’t just think about it, we will do it. [We are working with stakeholders who have identified what they see as a viable business. “
The trick, however, will be to get FTX’s books in order. According to Ray, who says he has never seen this in his career, Sam Bankman-Fried and his staff have sometimes failed to keep track of multi-million dollar transactions, which the CEO also describes as “spending sprees.
FTX’s current teams, which have undergone a major overhaul, are currently combing through more than 30 terabytes of FTX data in the hope of finding new assets. They have reportedly managed to get their hands on several of the exchange’s wallets in the last week alone.
The market reacted strongly to the announcement, as the FTT, the bankrupt exchange’s utility token, was able to make an intraday rally of around 40%.
Figure 1 – FTT price action on 19 January
At the time of writing, the FTT is trading at around 2.24, reflecting an increase of almost 140% in value over the last 30 days. However, it is still a long way from its high (ATH) of $84 reached in early September 2021.
