Several crypto industry observers have expressed skepticism about FTX CEO John Ray’s vision for a potential relaunch of the crypto exchange, citing issues of trust and “second-rate” treatment of users. citing as reasons why consumers “can’t feel safe going back”.
Former FTX CEO Sam Bankmanfried tweeted on January 20 praising John Ray for seeing the FTX reboot as the best move for his customers.
I’m glad Mr. Ray is finally paying lip service to getting the exchange back on after months of squashing it!
I’m still waiting for him to finally admit that FTX US is solvent and give customers their money back…https://t.co/XjcyYFsoU0https://t.co/SdvMIMXQ5K
— SBF (@SBF_FTX) 19 January 2023
This comes after John Ray told the Wall Street Journal on January 19 What he was thinking about. Restoring crypto exchanges to make users whole.
Ray noted that despite being superior authorities Charges of criminal misconduct, Stakeholders have expressed interest in the platform’s return potential – seeing the exchange as a “viable business”.
In comments to Cointelegraph, Binance Australia CEO Leigh Travers believes it will be difficult for FTX to re-license, especially when the industry is a new one. years with increased regulation and oversight by regulators.
Travers also noted that since the shutdown, FTX users have migrated to “other platforms, like Binance.” He questioned whether those customers would “feel safe going back.”
They addressed the issue of FTX governance and controls, with administrators sharing details about some clients receiving “preferential treatment”, including “backdoor switches”. Travers noted:
“How will consumers feel comfortable going back to a platform that some clients consider second-rate?”
Digital assets lawyer Liam Hennessy, a partner at Australian law firm Gadens, believes that for FTX – given the reputational damage and lack of trust – clients or investors “will be able to approach them again.” It would be “very difficult” for
Hennessy also doubted whether FTX would be approved for relicensing, saying it was “a big question mark” that depended entirely on the jurisdiction.
The lawyer believes that in some offshore jurisdictions, it will be easier for an exchange to get license approval, but that would be pointless if its customers do not intend to return.
“Major jurisdictions such as the US, UK and Australia will set out to jump through the hoops that will be a serious challenge.”
Related: FTX Receives Over $5B in Cash and Liquid Crypto: Report
Meanwhile, Aaron Lane, senior law lecturer at the RMIT University Blockchain Innovation Hub, told Cointelegraph that it was “not surprising” that the FTX exchange would consider reviving the business, saying that the purpose of the Chapter 11 process is is — to provide the ability to propose to the company. A plan to operate the business and repay creditors “in a timely manner subject to court approval.”
He believes that “times will be upon FTX,” or a creditor that files a competing plan, to demonstrate that creditors have a “better outcome” under a reorganization plan than liquidating FTX’s assets. ” will get.
However, Lane also questioned whether users would ever trust FTX again, saying it was possible that another company would want to launch a new exchange “purposed for these assets” rather than develop its own interface from scratch. .
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