FTX - Once the worlds best crypto exchange, went bankrupt under a crowd of impropriety and fraud. Now the administrators are seeking to reestablish the FTX Exchange as a functioning business. You might ask why anyone would attempt this given all the bad blood but here we explore the main reasons.
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FTX Bankruptcy
FTX was the worlds second largest exchange. FTX was founded by Sam Bankman Fried (later dubbed Scam Bankrupt Fraud) who was the darling of the venture capital world, regulators and institutional clients. The official story was that Sam made a huge amount of money from the Kimchi Premium in 2017 and used it to start FTX. Within a few short years he grew it into the exchange of choice for traders and institutional clients worldwide. But in a few short days in November 2022 the world saw the multi billion dollar exchange unravel. As it turned out the exchange was not backing the client balances 1:1 but instead relying on the value of its token FTT which plunged exposing the whole game. FTX filed for chapter 11 and here we are with the administrators suggesting that FTX the exchange be relaunched. Speculators are already buying up FTT (The FTX token) on the news with FTT up almost 50%.
Why An FTX Reboot Makes Sense
Reason 1: FTX Exchange Was The Best Product
As a product the exchange was unparalleled. The reason it was preferred by traders and institutions is that it was "made by traders for traders". Unlike other exchanges which were made by crypto natives that were reinventing the wheel, FTX was made for traders from the beginning. It was incredibly easy to use and intuitive as well. It had everything a trader needed in one place including futures, and perpetuals on most markets that had spot. This meant you could hedge and also take risk (margin trading) as well as put on various strategies.
Another key feature was the ability to go into negative balance. This is brilliant for traders as it adds a huge amount of flexibility. So for example you could sell ETH that you didn't have as long as you had enough BTC to cover it and the overall position was positive.
Reason 2: Returning Funds to Victims of the Bankruptcy
There is every chance that someone pays handsomely for the chance to reboot FTX and the funds will go into the kitty for repayment of debts to creditors (ex-clients). There is also the option to give creditors a stake in the new FTX and if it is successful this could be lucrative down the track. It would be great to see those hurt by FTX's death get repaid.
Reason 3: It's just crazy enough to work.
The reason Elon invested in DOGE is because it was a joke coin. The irony of a joke coin doing well was enough to convince Elon to have a crack. Re-lauching FTX may just be crazy enough to succeed.
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