Bankrupt Crypto Company Founded By Disgraced Alleged Fraudster Is Planning A Comeback
John Hugh DeMastri on June 28, 2023
FTX, the bankrupt cryptocurrency exchange co-founded by disgraced former billionaire, Democratic megadonor and alleged fraudster Sam Bankman Fried, is looking for investors to “reboot” the company, CEO John J. Ray III told The Wall Street Journal Wednesday.
Ray took over as CEO after the company filed for bankruptcy in November 2022, amid a flurry of reports that Bankman-Fried — who was the second largest donor to Democratic causes in 2022 — and other high-ranking FTX executives had allegedly stolen billions from customers to fund a lavish lifestyle involving video games, drugs and expensive real estate. He had initially floated the idea of a reboot in January, arguing that the alleged criminal behavior of FTX’s former leadership did not change the fact that the company’s business model was viable.
“I find the restart of FTX a pretty tall order given the recent enforcement actions against U.S. crypto companies and the major reputational damage FTX has suffered,” Thomas Braziel, partner at FTX creditor 507 Capital, told the WSJ. Braziel is apparently referencing a recent lawsuit filed by the U.S. Securities and Exchange Commission against Binance and its co-founder Changpeng Zhao for alleged violations of U.S. securities laws.
While Bankman-Fried now faces up to 115 years in prison for his alleged role in FTX’s demise, the company “has begun the process of soliciting interested parties to the reboot of the FTX.com exchange,” Ray told the WSJ. Sources familiar with the talks surrounding FTX’s revival told the outlet that the company is likely to rebrand as part of any reboot, and is exploring ways to compensate damaged customers, including offering them stocks in the reorganized company.
The new CEO, who has conducted a thorough review into Bankman-Fried’s leadership of FTX, has warned that it may be impossible to make some clients whole, as the company is roughly $9 billion short of the necessary funds to pay back its clients.
FTX did not immediately respond to a Daily Caller News Foundation request for comment.
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