HomeCryptoNow-defunct FTX crypto exchange could be revived

Now-defunct FTX crypto exchange could be revived

Almost a year after one of the biggest crashes in cryptocurrency exchange history, the administrators in charge of what’s left of FTX may decide to reopen its doors and return to the crypto exchange market.

FTX Trading Ltd. is considering this option after receiving offers from a number of companies that would like to invest in the cause and take advantage of its customer base of 9 million users.รน

The crypto exchange has managed to recoup much of the $9 billion deficit owed to investors on the old platform and could now seize the opportunity to revive the business.

The final decision could come as early as December, with the centralised exchange ready to reopen as early as a few months into 2024.

In the meantime, the FTT currency has been positively impacted by the news and has attacked graphical resistance, with traders speculating on a possible return to usefulness for the exchange’s crypto asset.

See all the details below.

FTX crypto exchange considers restart

FTX, the cryptocurrency exchange that went bankrupt in November 2022 after being criminally mismanaged by its founder and his loyal team, may now return to offering cryptocurrency exchange services to its customers and usher in a new era.

This was revealed during a court hearing in WIlmington, Delaware, where banker Kevin M. Cofsky of Weinberg Partners (an affiliate of FTX Trading LTD.) expressed the feasibility of such an event.

The former crypto trading leader is considering proposals from three bidders to resume trading.

These include the option of a complete liquidation of all remaining assets in the hands of the bankruptcy trustee, which amount to about $7 billion, or the involvement of other companies to help the crypto exchange get back on its feet by exploiting the 9 million customers still associated with FTX.

Cofsky said during the hearing that he is working with multiple parties on a daily basis to carefully consider all avenues for the company to obtain maximum value in the marketplace, with the goal of fully recovering the approximately $9 billion in debt it carries on its shoulders.

The percentage of recovery that creditors will receive will depend in part on the value that FTX can realise from a potential sale or relaunch of the exchange.

As explained, should the recovery plan go through, 66% of the remaining funds in the crypto exchange’s coffers would be used to repay creditors, while the remaining 33% would be invested in the project.

John J. Ray III, the current CEO in charge of managing the FTX puzzle, and the other receivers could make a final decision as early as mid-December, with a possible relaunch of the centralised exchange as early as mid-2024.

Meanwhile, Sam Bankman Fried, the former CEO of the exchange and mastermind of the fraud perpetrated against investors, is facing a maxi-trial in New York and, if convicted, may never see the light of day again.

The allegations against him are numerous and far-reaching, and have become more serious after Caroline Ellison, the former CEO of FTX’s sister trading company, revealed some baffling, untold facts about Bankman Fried’s management of the exchange.

The allegations include the diversion of FTX customer funds to Alameda Research for high-risk trading, political contributions and extravagant property purchases before the inevitable collapse of both companies.

The judges could bring the case to a close with a verdict as early as tomorrow.

FTT and its reaction on the crypto market

Following the news that revealed the possibility of the FTX crypto exchange reopening, the FTT cryptocurrency reacted positively on the markets, recording a +5% increase in the last 24 hours.

The cryptocurrency, which was previously the central resource of the centralised exchange and could be used by customers to obtain discounts on trading fees and other services, is now devoid of value and utility.

In the event of a revival of the exchange, the FTT would once again make sense and could come back into vogue among crypto investors.

Of course, it is not certain that the resource will be used as it was in the past within the new exchange, and there is also the possibility that it will be abandoned forever.

However, considering that several users had funds in FTT within the crypto exchange before the infamous collapse, it is likely that the coin will be included in the plan in the event of a restart.

Traders are betting on this hypothesis, sending the price of the token soaring to $1.21 yesterday, up 11.59% in just one hour of trading.

Hourly chart of FTX token price (FTT/USDT)

FTT is currently trading at $1.12, a far cry from its all-time high of $85.7, which is now destined never to return.

While crypto may indeed regain the utility it once enjoyed, it should be noted that investors’ lack of confidence in FTX will play a crucial role in this process.

It is highly unlikely that the trading platform will be able to re-establish itself as a leader in centralised trading, given and taking into account all of its highly derogatory history.

Think, for example, of a relaunch of Bernie Madoff‘s hedge fund and the institutional trust it might gain after the infamous manager defrauded the entire US financial sector, including the Securities and Exchange Commission, out of $30 billion.

Unfortunately (or fortunately), such incidents of investor fraud remain indelible in the minds of those who witnessed them at first hand.

FTX may well return to the market, but it will never be able to regain the confidence it gained during the 2021 bull run.

FTT may well have excellent chart performance, but it is highly unlikely that it will reach the highs seen before the biggest crash in cryptocurrency history.

With every privilege comes responsibility: if you don’t take responsibility, you will lose the privilege.

Alessandro Adami
Alessandro Adami
Graduated in "Information, Media and Advertising", for over 4 years interested in the cryptocurrency and blockchain space. Co-Founder of Tokenparty, community active in spreading crypto-enthusiasm. Co-founder of Legal Hackers Civitanova marche. Information technology consultant. Ethereum Fan Boy and supporter of Chainlink oracles, strongly believes that smart contracts will be central in the development of society.