New FTX CEO Announces Plans to Restart Bankrupt Exchange. FTT Price Soars 35%.

New FTX CEO Announces Plans to Restart Bankrupt Exchange. FTT Price Soars 35%.

23 January 2023

New FTX CEO John Jay Ray III made a statement that he would support restarting the insolvent exchange if it means returning money to consumers and other creditors.

“Everything is on the table,” Ray said in an interview with WSJ on Thursday. According to him, the exchange is working with stakeholders who have defined what they believe to be a viable business model.

This interview led to a 35% rise in the value of the FTX’s native token, FTT. Since the exchange’s dramatic collapse, the price of FTT has fallen by 90%. During its heyday in September 2021, the token was worth around $70.

The bankrupt cryptocurrency exchange claimed Tuesday that it had discovered $5.5 billion in available assets, but that based on current estimations, both the company’s foreign and US-based exchanges still face a “substantial shortfall” in what they owe clients.

According to a court filing containing the restructuring team’s latest findings, the $5.5 billion consists of $1.7 billion in cash, $3.5 billion in digital currencies, and $0.3 billion in equities. It should be noted that the company’s FTT token represents $529 million of the company’s digital assets.

Last Wednesday, a Sullivan & Cromwell lawyer for FTX informed a federal bankruptcy court that the restructuring team was in the process of selling an additional $4.6 billion worth of non-strategic, illiquid assets.

While the actual amount of the difference between the exchange’s assets and the obligations owed to creditors is still unknown, the exchange’s ex-CEO Sam Bankman-Fried has stated that the American division of FTX “was and is solvent.”

Bankman-Fried, who is now being held on bond at his parents’ house in Palo Alto, said the law firm is “very deceptive.”

Before declaring bankruptcy, FTX gave Sullivan & Cromwell $20.5 million in fees for services connected to the firm’s role as a legal advisor on numerous commercial deals.

Earlier, the US Trustee argued to the Judge that an independent examiner was necessary because of concerns about a potential conflict of interest.

According to court documents, numerous US Senators have expressed worry that the law firm is unqualified to defend FTX. One FTX creditor concurred, comparing the current situation to “a brazen attempt by a fox to guard a henhouse.”

The new CEO also stated that he was not originally provided information on how FTX handled its funds and cryptocurrencies but was assisted by Gary Wang, FTX co-founder, and Caroline Ellison, the former head of FTX’s affiliated company Alameda Research.

According to a Justice Department lawsuit released on December 21, both Wang and Ellison pled guilty to criminal charges relating to how FTX permitted Alameda Research to waste billions of dollars in client funds.

“We don’t need to be conversing with him,” John Jay Ray said regarding contacts with Bankman-Fried. “He hasn’t revealed anything to us that I don’t already know.”

It is scheduled that Ray will give testimony in a federal bankruptcy court in Delaware on Friday, January 20, about the decision to retain Sullivan & Cromwell as the debtors’ counsel. A court is also expected to decide whether to keep the names of some FTX creditors confidential.

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