Part of the shortlisted investors that want to relaunch FTX includes Proof Group.
After former FTX boss Sam Bankman-Fried (SBF) was found guilty of all the charges by a court jury last week, reports have emerged of shortlisted venture capital firms seeking to relaunch the former top-rated cryptocurrency exchange. According to Kevin Cofsky, a partner at Perella Weinberg, three investment firms have been shortlisted to take over FTX assets including the 9 million customers. Reportedly, a Silicon Valley-based firm Proof Group, which was part of the Fahrenheit consortium that won the bid to acquire Celsius assets, is part of the three shortlisted investors seeking to reboot the distressed cryptocurrency exchange.
The reboot of FTX has been described as a critical component of making the investors and customers whole again. Moreover, a $13 billion hole was identified on the FTX’s balance sheet during the restructuring process, whereby the investigators found out that the funds were diverted to private investments and political donations through Alameda Research. Consequently, the FTX customers and creditors may have to be given IOUs through shares in the new company after the relaunch process is complete.
According to Perella Weinberg Partners that is involved in the FTX restructuring process, other venture firms that have shown interest in the bankrupt entity include digital assets fintech firm Figure, and Tribe Capital.
FTX Restructuring Process
With SBF facing up to 115 years behind bars, the affected FTX investors who have partly been vindicated are now facing the regulatory hurdles that other cryptocurrency exchanges in the United States are experiencing. Moreover, the United States Securities and Exchange Commission (SEC) and other agencies have been pushing for the cryptocurrency market to be regulated under the securities laws despite a different opinion from other global jurisdictions.
Already, the US SEC has charged several cryptocurrency exchanges including Binance and Coinbase Global Inc (NASDAQ: COIN) for offering unregistered securities in the form of digital tokens. Nonetheless, the US SEC has lost some of its crypto-related cases including with Grayscale Investments, Uniswap DEX, and partly with Ripple Labs following the summary judgment in early July.
As of Nov 3, #FTX had transferred ~$221.7M in crypto assets.
— Lookonchain (@lookonchain) November 3, 2023
Consequently, FTX cryptocurrency exchange is eventually going to rebrand and offer trading for assets like Bitcoin (BTC), Ethereum (ETH), Dogecoin(DOGE), and stablecoins, among many others. Meanwhile, the successful bid will have to deal with token lockups that former FTX executives had invested in before filing for bankruptcy protection. For instance, FTX was heavily invested in Solana, whereby it has so far deposited about $102 million in SOL tokens to centralized cryptocurrency exchanges in preparation for liquidation.