Efforts to revive FTX are drawing near a close with three possible buyers, according to recent reports. The former New York Stock Exchange (NYSE) president, Tom Farley, has expressed interest in purchasing FTX through his crypto exchange, Bullish. Alongside Farley, the crypto VC firm Proof Group and the fintech startup Figure Technologies are also vying to buy FTX. These potential buyers have emerged from a pool of over 70 interested parties, as reported by the Wall Street Journal. Despite the large number of contenders, the list has now been narrowed down, and a winning buyer is expected to be chosen by December.
If the successful buyer is able to restart FTX’s operations upon the company’s exit from bankruptcy in 2024, a potential revival seems promising. This revival could bring hope for customers who lost funds during FTX’s collapse. There are indications that these customers might receive compensation in the form of shares in the new company or new crypto tokens. Nevertheless, the Wall Street Journal reported that approximately $9 billion of customer deposits remains unaccounted for, leaving the extent of potential compensation uncertain.
Once a prominent player in the crypto exchange market, FTX enjoyed the status of being one of the largest exchanges, with daily trading volumes reaching billions of dollars. It attracted attention not only for its financial prowess but also for its high-profile sports and celebrity partnerships, which brought the platform into the mainstream spotlight. However, the company’s downfall began when it filed for bankruptcy in November 2022, revealing its financial mismanagement. FTX’s inability to honor customer withdrawal requests ultimately led to its collapse.
Adding to FTX’s troubled history is the recent conviction of its founder and former CEO, Sam Bankman-Fried, on charges related to fraud. While Bankman-Fried could potentially face a prison sentence of up to 110 years, experts expect that his actual sentence will be considerably reduced. However, his involvement in fraudulent activities reflects poorly on FTX, further tarnishing its reputation. This tarnished reputation could pose challenges for attracting new and returning customers, even if a buyer successfully reopens the platform in the coming months.
While there is hope for FTX’s potential revival under new ownership, uncertainties loom over the process. The possibility of a successful buyer restarting operations and compensating customers remains uncertain, especially considering the significant amount of unaccounted customer deposits. Moreover, FTX’s tainted history, marked by financial mismanagement and the conviction of its former CEO, raises doubts about its ability to regain trust and attract customers. Only time will tell if FTX can redeem itself and carve out a new path in the competitive crypto exchange landscape.