FTX’s Dr. Frankenstein Tries to Revive Dead Crypto Exchange

Other than Terra, FTX is perhaps the biggest synonym for failure in the crypto industry. It’s a three-letter word dragged so far through the mud that it’s hard to distinguish it from a cow patty. Yet enough people working at the exchange think people would be interested in a reboot. So much so, FTX’s new CEO has actively worked on a so-called “2.0.”

As first reported by Decrypt, documents posted Monday by FTX in its ongoing bankruptcy reveal FTX’s current CEO John Ray III has spent several hours at a time working on a potential “restart” of the exchange. On April 17, Ray reportedly spent nearly 1 and a half hours reviewing the steps needed to restart FTX, while on the 19th of the same month he took less than an hour to “review and finalize 2.0 reboot of exchange material for distribution.” The last item of April was a “review and comment on 2.0 bidder list.”

Some of these items mention companies, like the investment bank Perella Weinberg Partners LP which supplied steps in a potential reboot plan. Ray also talked with cybersecurity firm Sygnia for “exchange fortification.” Who would be actually interested in bringing back this Frankenstein’s monster? Well, Bloomberg reported last month that venture capitalists from the firm Tribe Capital met with FTX’s creditor committee back in January to suggest a fundraising campaign. Tribe had previously invested in FTX, and any buyout would reportedly attempt to keep the name.

For each of these items, Ray charged the company thousands of dollars per hour for his efforts. He charged a total of $290,160 for his work in April alone. As a summary of his work, Ray declared he spent time implementing several elements of the exchange such as cybersecurity and cash management “that did not exist, or did not exist to an appropriate degree, prior to Mr. Ray’s appointment.”

Ray has previously mentioned in January that stakeholders were pressuring him to restart the exchange, and at least at the time he was amenable to the idea. He told The Wall Street Journal at the time “If there is a path forward on that, then we will not only explore that, we’ll do it.” Last month, an attorney for the bankrupt crypto exchange, Andy Dietderich, said the exchange’s leadership was thinking about restarting the failed company because the situation was “stabilized.” FTX will need to decide in the second quarter whether a full restart is feasible, according to his presentation.

Ray has previously called FTX a “complete failure of corporate controls” and has reported that former FTX CEO Sam Bankman-Fried and his executive cronies were such poor managers they would joke about losing millions of dollars at a time. FTX has struggled to recover billions in customer funds that went missing, but Dietderich said in April that the company had recovered $7.3 billion of the missing $9 billion, partially due to rising bitcoin prices.

In the meantime, Bankman-Fried’s name is just as sullied as his former exchange. He’s facing more than a dozen criminal charges alleging everything from fraud, to campaign finance violations, to bribing Chinese officials. But beyond that, who wouldn’t want to associate with the big old FTX brand?