Kraken Co-founder Critiques FTX Reboot, Calling It a Step Backward

Days after FTX unveiled a reboot plan, Kraken FX co-founder Jesse Powell raised concerns over the viability of the FTX relaunch, suggesting that it might face challenges worse than starting from scratch.

The troubled crypto exchange recently revealed a new strategy to relaunch and settle its debts, but doubts persist about the success of this plan.

Powell’s skepticism stems from the existing hurdles that FTX faces. The tarnished reputation of the exchange and the absence of a functioning team, licenses, and banking facilities make its revival a complex endeavor.

Rather than pursuing the current relaunch, Powell proposes a different approach – auctioning off FTX’s domain name and initiating operations under a new platform. This alternative path, he argues, could better address the challenges and provide a fresh start.

FTX’s tumultuous history includes a high-profile collapse due to allegations of misappropriation and misuse of customer funds. Despite these setbacks, FTX’s new CEO, John J. Ray III, believes in the potential for a successful relaunch.

The new draft plan, released on Monday, outlines FTX.com’s intention to establish an offshore entity for claimants to hold equity securities, tokens, or other interests.

The plan also includes provisions for repaying creditors and addresses customers’ claims. Notably, FTX plans to eliminate its native token, FTT.

However, a group representing FTX customers has criticized the reboot plans as “extremely disappointing.” FTX’s Official Committee of Unsecured Creditors (UCC) expressed dissatisfaction with the lack of communication and consultation from the FTX team.

The UCC group highlighted the absence of a crypto-experienced leader to helm the relaunched company, underscoring concerns about the execution of the proposed strategy.

As FTX navigates its path toward recovery and rebirth, industry observers closely monitor the unfolding developments and evaluate the feasibility of the exchange’s ambitious relaunch plan.