The CEO and chief restructuring officer at collapsed cryptocurrency exchange FTX is considering restarting it.
The Wall Street Journal reported that John Ray has set up a taskforce to explore the possibility.
He says the aim would be to “recover more value” to reimburse people who lost money in the now-bankrupt business.
The alternative would be to liquidate FTX’s assets or sell the platform.
Founder and former CEO Sam Bankman-Fried was recently granted bail after posting a $250 million bond guarantee, having pleaded not guilty to eight criminal charges including fraud at FTX and its sister company Alameda Research.
He is accused of using billions of dollars of funds from FTX to cover losses at trading firm Alameda.
Ray, a restructuring specialist who oversaw the aftermath of the collapse of energy and commodities giant Enron, has previously said FTX’s customer assets were “commingled” with that of Alameda.
Ray said Alameda “used client funds to engage in margin trading which exposed customer funds to massive losses” and had never “seen such a complete failure of corporate controls”.
Around $8bn of funds are estimated to be missing from FTX, which was valued at $32bn a year ago.
FTX says that around $415m of crypto has been stolen by hackers – $323m from its international exchange and $90m from its US platform – since the firm filed for bankruptcy in November.
Crypto lender Genesis files for bankruptcy
The lending unit of cryptocurrency company Genesis has filed for Chapter 11 bankruptcy protection in New York.
Genesis owes creditors more than $3 billion and customers have been unable to withdraw funds since November. This week its parent company Digital Currency Group halted quarterly dividend payments to shareholders indefinitely as it attempts to preserve liquidity.
Among the $3bn, $900m is owed to customers of Gemini, the crypto exchange owned by twins Cameron and Tyler Winklevoss, and €280m to Dutch exchange Bitvavo.
According to the filing, Genesis’ lending unit has assets and liabilities between $1 billion and $10bn, with more than 100,000 creditors.
Also filing for bankruptcy protection were Genesis Global Holdco, the parent group of Genesis Global Capital, and another lending unit Genesis Asia Pacific.
The former is willing to explore a sale and has $150 million in cash to support the restructuring.
Genesis’ derivatives and spot trading, broker dealer and custody businesses are not part of the bankruptcy process and will continue to trade.
Cameron Winklevoss recently called for Barry Silbert to be removed as CEO of DCG and, following the bankruptcy filing, tweeted: “Unless Barry and DCG come to their senses and make a fair offer to creditors, we will be filing a lawsuit against Barry and DCG imminently.”
Earlier this month, Genesis and Gemini were charged by the US Securities and Exchange Commission with illegally selling securities to investors through their jointly-issued Earn lending product.
Cryptocurrency shorts
Crypto lending company Nexo has agreed to pay a $45m penalty for failing to register its retail lending product the Earn Interest Product. It will pay the US Securities and Exchange Commission $22.5m and another $22.5m to settle with state regulators including New York, Texas, Washington and Alaska. Nexo will also be required to stop offering the EIP to investors in the United States. It did this last February and is exiting the US market over regulatory uncertainty.
Plai Labs has raised $32m in seed funding led by a16z. The Web3 social platform builder is led by several former executives of gaming studio Jam City and early social platform Myspace.
Scenario Inc. has raised $6m from Play Ventures, Anorak Ventures, The Venture Reality Fund and Founders Inc as well as angels including Oculus co-founder and CEO Brendan Iribe and Twitch founder Justin Kan. Its GenAI engine, a suite of generative AI tools for creating videogame assets, has more than 20,000 artists and developers on its early access programme.
China’s Central Bank Digital Currency – the digital yuan (eCNY) – now has smart contract functionality. When people place a retail or food order using e-CNY on the Meituan app, a smart contract triggers and searches for keywords in the order then places them in a draw to win cash prizes.
Crypto prices
The overall market cap of the 22,300 coins is at $975 billion at the time of writing (7am UK), a 0.6% increase in the last 24 hours.
For round-ups of recent cryptocurrency news developments, click here.
For valuations of the top 100 coins by market cap in US dollars, plus 24-hour price change, see below.