Kraken co-founder Jesse Powell doubts FTX 2.0’s potential to bounce back from bankruptcy. In a tweet, he criticized the proposed recovery plan for the struggling exchange.
Powell believes starting from scratch would be a better option claiming FTX 2.0 lacks technology, licenses, banking, and has to deal with a damaged reputation.
The co-founder also suggests that the trustee in charge of FTX’s bankruptcy should auction the platform’s trademark and domain to the highest bidder.
FTX 2.0 would be worse than starting from scratch. No team, no tech, no licenses, no banking, tarnished brand. The trustee should just auction off the domain and trademark to the highest bidder. Anything beyond that is simply a fee extraction attack on delusional creditors. https://t.co/l7JirsbwjP— Jesse Powell (@jespow) August 2, 2023
In his view, FTX 2.0 appears to be nothing more than a “fee-extraction assault on creditor fantasists.”
He argued that even with the best legal minds at work, building a robust and safe exchange might not be possible.
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In his view, FTX will have trouble finding suitable candidates due to experts getting better job opportunities elsewhere. He assesses that experienced traders have also moved to other markets, causing FTX to lose its competitive advantage.
A bunch of lawyers aren’t going to build a secure, performant crypto exchange. People with the skill have better offers. To replicate the competitive advantages offered by FTX might not even be possible for a legit operation. Active traders moved on to other exchanges months ago.— Jesse Powell (@jespow) August 2, 2023
FTX advocator group stands up to Powell
Following Powell’s remarks, the “FTX 2.0 Coalition” voiced their opposition and advocated for the resurrection of FTX.
The coalition believes a reputable company with the necessary resources, expertise, and creditor alignment could effectively manage the exchange.
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They also consider the 1.8 million creditor-customers, now turned owners, as valuable assets for bootstrapping the relaunched platform.
We agree lawyers shouldn’t do it.The idea is to take it out of their hands and put it into the hands of a competent operator with the necessary experience, resources and creditor alignment.1.8 million creditor-customers turned owners are hugely valuable for bootstrapping.— FTX 2.0 Coalition (@AFTXcreditor) August 2, 2023
In June, FTX’s CEO, John J. Ray III, began soliciting interest for the relaunch of the FTX.com exchange.
FTX submitted a proposed reorganization plan that included creating a “rebooted” offshore exchange targeting customers outside the United States. However, the official unsecured creditors committee of FTX claimed they were excluded from the planning process, making the chances of a successful FTX revival doubtful.
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