In the wake of FTX’s recent announcement regarding a reboot plan, Jesse Powell, the co-founder of Kraken FX, has expressed doubts, suggesting that an FTX relaunch could be more challenging than starting from scratch.
FTX, a once-prominent crypto exchange that faced a notorious collapse, has unveiled a new strategy aimed at relaunching the platform and settling its debts. However, industry skepticism looms over the feasibility of this plan.
Powell points out that FTX’s current condition presents significant hurdles in reestablishing its presence in the market.
The exchange’s tarnished reputation is likely to deter potential customers, while the lack of a functioning team, necessary licenses, and banking relationships further complicates the relaunch efforts.
Rather than pursuing the current relaunch strategy, Powell proposes a more radical approach — auctioning off the FTX domain name and initiating a fresh start on an entirely new platform.
In his view, this would avoid the challenges associated with reviving FTX in its current form and extracting fees from creditors.
FTX’s downfall was marked by allegations of misappropriation and misuse of customer funds, leading to its eventual collapse. John J. Ray III, the newly appointed CEO of FTX, believes that despite its troubled history, there is potential for the exchange to make a comeback.
The relaunch plan outlined by FTX involves establishing an offshore company to facilitate the holding of equity securities, tokens, or other assets by claimants.
The plan also includes provisions for repaying creditors and settling customer claims, along with the intention to eliminate the native token, FTT.
However, the relaunch plan has faced criticism from a group representing FTX customers. The Official Committee of Unsecured Creditors (UCC) has expressed disappointment, citing the lack of consultation and consideration of their input in the development of the plan.
The UCC notes that the FTX team did not engage in discussions or meetings regarding the bankruptcy plans and highlights the absence of a crypto-experienced individual to oversee the relaunched company.