FTX 2.0: Kraken Co-Founder Argues Against Exchange Relaunch

Jesse Powell, co-founder of Kraken, has expressed concerns about plans to relaunch the bankrupt FTX exchange. This comes following the recent development in the international arm of the exchange, FTX.com, reboot plans.

Auction Off The FTX Domain And Trademark, Jesse Powell Says

On Wednesday, August 2, Kraken co-founder Jesse Powell tweeted his concerns about the plans to relaunch the FTX exchange. This was in response to another tweet by a former FTX user, agreeing that the exchange relaunch is “unnecessary.”

Powell believes that going ahead with the FTX 2.0 plans will be “worse than starting from scratch,” as there is no adequate framework to initiate such a process. He said the exchange has “no team, no tech, no licenses, no banking, and a tarnished brand.” 

The Kraken co-founder advised the trustee to “auction off the FTX domain and trademark to the highest bidder.” He claims the relaunch is simply a “fee extraction attack” on “delusional” investors. 

FTX 2.0 Coalition, a group of users who seem optimistic about a relaunch, criticized Powell’s comments via Twitter, saying that the creditors are not “delusional.” 

However, the Kraken co-founder replied to the group’s tweet, maintaining his stance about the potential reboot of the bankrupt exchange. Powell said in the response:

A bunch of lawyers aren’t going to build a secure, performant crypto exchange. People with the skill have better offers. To replicate the competitive advantages offered by FTX might not even be possible for a legit operation. Active traders moved on to other exchanges months ago.

A Recap Of FTX Relaunch Plans

Discussions around the reboot of FTX.com started in January when the company’s CEO, John J. Ray appointed a task force to explore the possibility of restarting the international arm of the collapsed crypto exchange.

In June, The Wall Street Journal disclosed that FTX was “weighing various options,” including relaunching as a joint venture. According to the report, the exchange considered customers’ compensation by offering them a share in the new FTX.com.

On Monday, July 31, FTX unveiled a draft creditor-repayment plan, while proposing a reboot of the international arm of the exchange – available to non-U.S. users only.

This reorganization plan will entail a categorization system for claimants, with FTX.com users referred to as “Dotcom customers.” According to the draft, non-U.S. customers could receive non-cash consideration through equity securities and tokens instead of a full cash settlement.

In the wake of this recent development, the official committee of unsecured creditors said that “business level negotiations” with the debtors, which are yet to occur, will start very soon.

FTTUSDT trading at $1.338 | Source: daily FTTUSDT chart on Tradingview

Featured image from Reuters, chart from TradingView