The FTX cryptocurrency exchange may not be dead.
The platform, the flagship company of Sam Bankman-Fried’s crypto empire, could be revived in the coming months.
So said John Ray, the CEO appointed on November 11 when the Bankman-Fried empire filed for bankruptcy, to handle the liquidation.
In his first public interview, Ray spoke to The Wall Street Journal and said some FTX executives, clients and investors praise FTX’s technology despite criminal charges brought against founder and former CEO Bankman-Fried.
So clients suggest there would be value in restarting FTX, the bankruptcy restructuring veteran said.
“Everything is on the table,” Ray told the Journal. “If there’s a way forward in that, then we’re not just going to explore it, we’re going to do it.”
Ray and Bankman’s Fried Commercial Picks
Ray is particularly known for leading the liquidation of bankrupt energy broker Enron.
The final decision will depend on whether FTX’s relaunch allows clients and investors to recover more of their funds or whether liquidating assets or even selling the platform is more advantageous for creditors.
FTX’s new CEO also launched fresh criticism of the behavior of his predecessor, who had indicated in media interviews and in recent posts that filing for bankruptcy was not the only option for FTX.
“We don’t need to have a dialogue with him,” Ray said, referring to Bankman-Fried. He hasn’t told us anything I don’t already know.
Bankman-Fried immediately responded: “This is a shocking and damning comment from someone pretending to care about customers,” the former trader told the Journal in a text message.
“Despite its insolvency, and despite processing approximately $5 billion in withdrawals over the last few days of operation, FTX International retains significant assets: approximately $8 billion in variable liquidity assets when Mr. Ray took office” , said. he claimed on January 12 without giving further details.
“On top of that, there were numerous potential funding offers, including post-Chapter 11 filing totaling over $4 billion. I think if FTX International had had a few weeks, it probably could have used its illiquid assets and capital to raise enough financing to bring customers substantially complete.”
FTX was valued at $32 billion last February.
NFL star Tom Brady was a major shareholder and ambassador for FTX, which he advertised in commercials with his ex-wife Gisele Bundchen.
The former couple separately owned a large part of the company. Brady owned 1.14 million shares of FTX Trading common stock, while Bundchen was a shareholder with 686,761 shares, according to court documents.
Bankman-Fried is under house arrest
The firm and its sister company Alameda Research, a hedge fund and trading platform, went bankrupt after their respective clients rushed to withdraw their money by selling the cryptocurrencies they had previously purchased.
FTX was using the client’s cryptocurrencies as collateral to borrow money, which it had in turn transferred to Alameda Research with whom it shares several links. Alameda used this money to invest in crypto companies and also for commercial operations.
Ray and his team have painted an unflattering picture of the Bankman-Fried regime.
“Never in my career have I seen such a complete breakdown of corporate controls and such a complete absence of reliable financial information as occurred here,” Ray wrote in a 30-page document filed with the US Bankruptcy Court for the District of Delaware in November. .
“From the integrity of compromised systems and flawed regulatory oversight abroad, to the concentration of control in the hands of a very small group of inexperienced, unsophisticated and potentially compromised people, this situation is unprecedented.”
The Department of Justice and the Securities and Exchange Commission filed a series of criminal and civil charges accusing Bankman-Fried of fraud.
“Bankman-Fried was orchestrating a massive, years-long fraud, siphoning billions of dollars of trading platform client funds for his own personal gain and to help grow his crypto empire,” the SEC alleges in its civil lawsuit. .
He was released after his parents, both law professors at Stanford University, signed a $250 million acknowledgment bond pledging their California home as collateral. Two other friends with significant assets also signed, according to news reports.
During a January 3 hearing in the US District Court in New York, Bankman-Fried pleaded not guilty.
The trial is scheduled for October 8.
