FTX, the defunct cryptocurrency exchange, has reportedly initiated negotiations with investors to support the relaunch of its international trading platform under new leadership.
According to Wall Street Journal, the company, now under the management of new owner CEO John J. Ray III, aims to emerge from bankruptcy in November 2022.
A Strange Idea
The team announced its revival plan earlier in May 2023; and it has since made considerable efforts to move to that direction.
As part of the relaunch strategy, FTX has accelerated the bidding process with a series of meetings over the past few months. The company’s efforts have drawn attention from industry insiders and market observers.
Discussions with potential investors are already underway. The objective is to secure the necessary financial support and expertise to reestablish the global trading platform. By soliciting interested parties, FTX aims to gather the resources required to reinvent itself in the competitive cryptocurrency market.
Rebranding is also on top of mind. Since the current name “FTX” completely demoralizes most of crypto members, a fresh name is vital to reshape user perceptions and restore trust in the platform.
The exchange has faced significant public backlash following the event that turned the market upside down last year, with a number of lending entities exposed to risk-management failures.
Additionally, the ongoing discussions also focus on compensation for existing customers. FTX is reportedly exploring various options, including the possibility of offering shares in the new platform to compensate those affected by the previous bankruptcy proceedings.
Blockchain technology company Figure has expressed interest in assisting with the revival of FTX 2.0. Figure, known for its involvement in the industry, previously vied for the opportunity to acquire the bankrupt Celsius Network, albeit unsuccessfully.
Their interest in FTX’s relaunch demonstrates the potential and allure the platform still holds for strategic partners.
FTX’s new leaders acknowledges that restoring the platform to full operational capacity is crucial for the repayment of debts and customer compensation.
The effort to repay creditors and customers has been ongoing since the company’s financial downfall. The revenue generated from a relaunched exchange would significantly facilitae recovery process.
The process of advisory, administrative, and legal proceedings has not come without its challenges. FTX has already incurred substantial costs, with advisory fees alone surpassing $120 million within three months.
The latest move comes amid intensified troubles between the U.S. regulators and major figures in the industry. Binance, the global cryptocurrency exchange giant, is grappling with a significant decline in its market share amidst escalating regulatory challenges and legal actions taken by the U.S. Securities and Exchange Commission (SEC).
The SEC is Going After Everyone!
The SEC’s lawsuits targeting both Binance and Coinbase have contributed to a bearish sentiment in the market.
According to data from CCData, Binance’s live trading market share witnessed a continuous downturn throughout June.
The figures reveal a decline from 43% in the previous month to 41.9% in June. This marks the fourth consecutive month of diminishing market share for Binance, with the current level being the lowest recorded since August 2022.
And yet, Binance is still standing as the world’s largest cryptocurrency exchange with a market share far ahead of its competitors. The rankings indicate that OKX secures the second position with a market share of 5.44%, followed closely by Coinbase exchange at third place with a market share of 5.37%.
FTX token ($FTT) soared 29.93% within the past 24 hours following the news of its relaunch. . But a lingering crisis of trust from the previous collapse might pose challenges.
Despite being technically possible, it remains to be seen if traders will trust the exchange at the heart of the biggest collapse in crypto history.