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FTX CEO John J. Ray III is forging ahead with his efforts to revive the bankrupt cryptocurrency exchange, according to a WSJ report.
According to Ray, the company “has begun the process of soliciting interested parties to the reboot of the FTX.com exchange.”
People familiar with the discussions also revealed that the failed crypto firm has engaged in preliminary talks with potential investors to support a restart of the international exchange FTX.com, potentially through a joint venture.
The sources told WSJ that there's a possibility existing customers might be offered a stake in the relaunched entity as compensation against their claims.
It is likely that the defunct crypto exchange would undergo rebranding as part of this relaunch, the sources said. And there's has been no indication of a restart of FTX's U.S. exchange, which constituted a relatively small portion of its business.
Boosted by the latest news, FTX’s native token FTT gained about 15% on Wednesday to hit the seven-week high $1.51, before retreating to $1.45 at the time of writing, according to CoinGecko.
Among the parties interested in supporting the revival of FTX, WSJ sources mentioned Figure, a blockchain technology company that was previously part of an investment group that vied for the opportunity to relaunch Celsius Network, another bankrupt crypto business. Figure ultimately lost to Fahrenheit, a crypto consortium that includes Bitcoin miner US Bitcoin Corp. and investment firm Arrington Capital.
Other potential parties seeking to participate in the FTX relaunch are required to notify the company and its advisors by the end of the week, according to sources familiar with the matter.
Neither FTX nor Figure immediately responded to Decrypt's requests for comment.
FTX possible relaunch at least a year away
Ray, who assumed leadership in November 2022 when FTX filed for bankruptcy, first floated the idea of a possible FTX reboot in January this year.
“There are stakeholders we’re working with who’ve identified what they see is a viable business,” Ray said at the time.
In April, FTX's lead attorney Andy Dietderich also suggested that the crypto exchange may be revived, although there wasn’t “any particular path forward” on the table.
A May court filing revealed that the FTX CEO engaged in several activities that may facilitate the revival of the bankrupt crypto exchange.
Per the document, Ray explored the steps required to restart the company, while also reviewing and finalizing the FTX 2.0 materials, which would be distributed to investors.
Citing court documents, Keystone Law's cryptocurrency partner Louise Abbott said that FTX will file its restructuring plans in Q3 2023, and expects to receive any decision on the future of any relaunch plans by the summer of 2024, which is still a year away.
“It is good news that the Liquidator is open to all possibilities but there is no evidence yet that a concrete plan to restart the exchange is in place – just hypothetical at this stage," Abbott told Decrypt. "If plans get off the ground, any restart will require significant capital, and then there is the question of whether the market would trust FTX."
According to her, "one line of thought is that FTX might offer investors a stake in the company – this seems to have been discussed at a senior level within FTX. This could offer former customers stock in the exchange, allowing them the opportunity to participate in any future growth (if there is any)."