Plans to restart the bankrupt cryptocurrency exchange FTX have been confirmed in a new staffing and compensation report filed with the United States Bankruptcy Court for the District of Delaware on Monday.
The document shows that acting CEO John J. Ray III spent hours engaging in several activities to devise a revival plan for the troubled crypto exchange in April.
The CEO first disclosed that reviving FTX was on the table in January, two months after the exchange collapsed due to a severe liquidity crunch. Ray, whose duty is ensuring that FTX’s creditors receive as much compensation as possible, noted that he would consider rebooting or liquidating the exchange’s assets, which would generate more value.
Last month, after FTX recovered roughly $7.3 billion in distributable assets, the exchange’s attorney Andy Dietderich revealed that the legal team would discuss subsequent steps for a potential reboot and plans to file a preliminary reorganization plan in July. He added that confirmation of the plan would likely take place in Q2 2024.
A few days later, reports emerged that San Francisco-based venture capital firm Tribe Capital was considering a $250 million fundraising campaign to help FTX restart its operations. Tribe reportedly intends to lead the round with $100 million from itself and limited partners. The firm’s CEO, Arjun Sethi, has already met with FTX’s committee of unsecured creditors to discuss the arrangement.
The latest court filing has hinted at plans for the exchange’s restart, as Ray spent more than six hours tending to related matters in the past month. Some activities include reviewing steps and materials and commenting on the FTX 2.0 bidder list. The exchange’s reorganization plan would involve a bidding process.
It is worth noting that reports about FTX’s revival are based on hypothetical statements and speculation drawn from internal information, as neither Ray nor the committee of unsecured creditors has released a concrete plan for the initiative.
While some members of the crypto community believe FTX 2.0 would be the better path to recovery for all involved parties, others doubt the plan’s viability. Clients who worked with the firm before its demise said it performed poorly due to high latency, bugs in the application programming interface (API) for traders, and coding difficulties.