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The FTX situation keeps getting weirder and weirder. John Ray III, the new FTX CEO, made a shocking statement late last month stating FTX is exploring options to restart the exchange.
FTT rallied 20% on that day alone.
So what do we think? Will FTX 2.0 launch and become a success? Is this a good opportunity to buy FTT at a low? Or should you stay the hell away?
Let’s answer these questions…
Disclaimer: Not financial nor investment advice. Any capital-related decisions you make are your full responsibility and yours only.
TLDR: Too Lazy, Didn’t Read
- FTX may restart, according to John Ray III. He said the team are open to all options that will help make customers whole. If FTX begins generating fees again, a large portion would go towards creditors/customers.
- FTT rallied on that news – 20% on the day. Crypto investors love speculating/gambling. And that’s all it was, no fundamental changes.
- FTT should not be touched under ANY circumstances. It won’t have any place in the new FTX if the exchange does restart. It is defunct.
How did we get here?
Last November, crypto exchange FTX went bust. It turned out to be one of the biggest fraud cases and Ponzi schemes in crypto history. Millions of customers, hundreds of crypto projects, and multiple centralised companies are tied even now into the now-bankrupt empire, and the many divorces are going to hurt.
FTX’s ex-CEO, Sam Bankman Fried (SBF), is out on a $200 million bail. He’s been charged with eight criminal counts, including wire fraud and conspiracy to commit money laundering.
John Ray III was appointed the new FTX CEO and is in charge of sifting through the wreckage. He previously served as chairman of Enron Creditors Recovery Corp., the company tasked with recovering funds from Enron after its collapse.
Ray seems determined to launch a cleaner and more trustworthy FTX.
So, what does this mean?
The sequel no one wanted?!
Ray said there may be value in re-animating the corpse that is FTX. This might seem crazy, but perhaps not be too far-fetched. Traders genuinely liked the technology and the UI (us included).
Yes, it will never have the same success as before – trust is shattered and finding customers will be difficult. But FTX would be under new management and face intense regulatory scrutiny. There’s almost zero chance of anything like the mismanagement that happened before reoccurring.
Also, it would be one of the best ways to make customers whole – by generating new revenue. If the exchange starts making money, maybe they can start paying back the billions of dollars they owe their clientele.
Cryptonary’s Take
Will FTX successfully restart?
We would say there’s a small chance of this happening.
Never say never, though. If FTX is born again, it won’t be anytime soon. Whether it would attract enough liquidity and customers to function is a monster question too. It would probably be safe to use. But then again, why take the risk?
Is this a good opportunity to buy FTT low?
Predictably, with the number of degens (degenerates) in the market, $FTT rallied on the news. For those not in the loop, this development might seem bullish, but it’s definitely not. This is PURE speculation and nothing more.
$FTT is a dead token – stay well clear of it. Even if FTX makes a comeback, FTT is done. We wrote a full report outlining the role of FTT. Any price action at this point is complete degeneracy. Here’s why:
- Whatever is left of FTX/Alameda’s holdings (a significant amount of FTT) WILL be used to make customers whole.
- By buying FTT, you’re donating to FTX/Alameda creditors/customers. Simple as that.
- FTT won’t have ties to a renewed FTX.
- IT IS GOING TO ZERO – and sooner, rather than later.
Action Points
- Do not touch FTT: “BUY THE DIP” is a crypto war cry, and FTT has certainly dipped, but trust us when we say this isn’t a case of buying the dip. Investing in $FTT is inexcusable under all circumstances.
- Look to invest in alternatives. Assets like BNB are definitely more promising, but DeFi projects are where the smart money is sniffing around. Check out this report for a DeFi asset with 7X potential this year.
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