FTX CEO unveiled its revival plan, which got the crypto community guessing about the possibilities of its success or failure.
On May 22, the bankrupt FTX cryptocurrency exchange disclosed its plans for revival. Its acting CEO John J. Ray III, confirmed it in a new staffing and compensation report. He spentspend hours and hours devising a reboot plan while filing the document with the United States Bankruptcy Court for the District of Delaware on Monday. Ray also said that the revival plan was ready right after two months after the exchange’s collapse.
What caused the FTX collapse?
A report published by CoinDesk highlighting some irregularities became the major reason behind its declinefall. It revealed that an FTX-affiliated trading firm, Alameda Research, was the major stakeholder in FTT, the native token of FTX.
This news started a domino effect, and all the pillars of FTX collapsed one by one. First, the rival exchange Binance sold all FTT tokens it held. Shortly after that, the former publicized its liquidity crisis and asked for a bailout from its venture capitalists. After showing initial interest, Binance eventually withdrew and backed out from the FTX acquisition.
The then-CEO Bankman-Fried admitted the non-US business liquidity crisis. The Bahamas froze the assets of FTX there. Bankman-Fried stepped down as FTX CEO and filed for Chapter 11 bankruptcy protection. The failure of FTX is one of the most resounding events in the crypto sphere. It led people to rethink the ethics of crypto-based organizations.
However, the crypto world is always moving ahead, and FTX won’t be the first firm trying to reinstate itself after bankruptcy. Lately, Core Scientific, a cryptocurrency mining company, also filed for bankruptcy after finding itself in a promising financial position.
When will FTX resume operationsstart?
Regarding the revival plan, Ray informed that the company recovered approximately $7.3 billion in distributable assets. However, its restart is not going to happen very soon. FTX’s attorney, Andy Dietderich, said that the preliminary reorganization plan world will be filed in July. Subsequently, the confirmation plan will most probably be submitted in Q2 2024.
Uncertainty in The crypto community is uncertain about it
While the news sounds optimistic, the crypto community received it with mixed responses. Many believe that the plans for revival are not viable. However, others think FTX 2.0 will give fruitful results to all the parties involved. Also, some clients complained about the poor performance of its API and coding. They are hopeful helpful that the platform works on those issues too.
