Can FTX restart all over again? Even though there hasn’t been much in the news about FTX recently, the crypto exchange’s new CEO reportedly told investors that he is looking into the prospect of relaunching the business.
According to an interview given by newly appointed FTX CEO John Ray III, “everything is on the table” regarding resurrecting the bankrupt company’s international exchange.
“We are making important progress in our efforts to maximize recoveries, and it has taken a Herculean investigative effort from our team to uncover this preliminary information. We ask our stakeholders to understand that this information is still preliminary and subject to change. We will provide additional information as soon as we are able to do so.”
Can FTX restart again?
According to WSJ, Ray, along with others trying to recover the lost assets, is investigating whether or not restoring the main international exchange would be of greater value to the company’s consumers and creditors.
According to a statement released by the company earlier this week, FTX debtors have reported $1.75 billion in cash, $3.5 billion in crypto assets, and $3 million in securities. In total, this amounts to around $5.5 billion in liquid assets, which Ray described as a “herculean effort” to evaluate the company’s financial health.
Debtors also offered background for FTX’s foreign and U.S.-based enterprises. After filing for Chapter 11 bankruptcy in November, FTX.com’s creditors discovered that the company had $1.6 billion in digital assets, of which $323 million had been transferred to unrelated parties. The announcement states that $426 million is now in cold storage under the supervision of the Securities Commission of the Bahamas, $742 million is in cold storage under the supervision of the FTX debtors, and $121 million is scheduled for transfer to the FTX debtors.
Meanwhile, debtors identified $181 million of digital assets associated with the U.S.-based entity, FTX US. After the bankruptcy filing, about $90 million was transferred without permission to third parties; another $88 million remains in cold storage under FTX debtor management; and another $3 million is pending transfer to debtor control.
Ray and Sam Bankman-Fried, the previous CEO of the FTX, have had disagreements over the exchange’s direction and whether or not it should have filed for bankruptcy. Bankman-Fried has expressed remorse over FTX’s bankruptcy filing and claimed in a recent Substack newsletter that FTX would have been able to repay all of its clients if Bankman-Fried had not been “forced” to file bankruptcy.
Bankman-Fried continued, “There were multiple prospective finances offers — including signed LOIs after chapter 11 filing totaling over $4b. In my opinion, FTX International probably could have used its illiquid assets and stock to acquire sufficient funding to make consumers significantly whole if it had been allowed a few weeks more.
For his part, Ray has stated in the past that Bankman-Fried has “no ongoing function at FTX” and does not represent the company when making public statements. Ray stated in mid-December that FTX’s risk management systems had “essentially no internal controls” during a U.S. House Financial Services Committee meeting.
Alameda or its venture silo was not audited. However, both FTX US and FTX.com were audited, as Ray mentioned. Prager Metis and Armanino performed the auditing. The quality and honesty of those audits are something Ray can’t comment on. “I don’t trust any paperwork in this company.”
The FTX story continues to grow. The controversial cryptocurrency exchange has made headlines in the past with headlines such as:
- Former FTX CEO SBF arrested
- FTX founder gave an interview for the first time after the crypto exchange’s crash
- The shocking FTX scandal is becoming an Amazon TV series
- After FTX collapse, Binance under investigation
- FTX class action lawsuit explained
- How did FTX collapse: What happened to FTX crypto?