Plans to bring Sam Bankman-Fried’s crypto exchange FTX back to life are currently underway. Three bidders, including a company run by former New York Stock Exchange President Tom Farley, are vying to buy the remnants of the now-bankrupt exchange. And Securities and Exchange Commission chairman Gary Gensler has indicated he would be open to a revived FTX — provided the new leadership remains within the bounds of the U.S. law and maintains investor trust.
FTX’s native token FTT has enjoyed a dramatic rally today, jumping a whopping 76.4% over the past 24 hours as FTX 2.0 excitement returns following Gensler’s remarks. FTT is now trading at $2.20, according to CoinGecko — a level not seen since mid-April.
FTX Rebirth Possible — But Under One Condition
Crypto exchange FTX, helmed by the now-convicted fraudster Sam Bankman-Fried, has received multiple bids for a potential reboot. Ex-New York Stock Exchange President Tom Farley’s crypto exchange Bullish is among three leading bidders in the running to buy the remaining assets of FTX in a bankruptcy auction.
SEC’s chair Gary Gensler responded to reports that Farley is among the bidders, along with Figure Technologies and Proof Group, during a “sideline” discussion with CNBC reporter MacKenzie Sigalos. “If Tom or anybody else wanted to be in this field, I would say, ‘Do it within the law,’” Gensler told Sigalos.
FTX, at the time one of the largest crypto exchanges, imploded last November after jaw-dropping revelations concerning the state of its balance sheet came to light. The auction winner can reboot the exchange after its proposed exit from bankruptcy in 2024.
Gensler advised the next owner of the FTX brand:
“Build the trust of investors in what you’re doing and ensure that you’re doing the proper disclosures — and also that you’re not commingling all these functions, trading against your customers or using their crypto assets for your own purposes.”
Although FTX and its sister firm Alameda Research were initially two separate businesses, the evidence presented during Bankman-Fried’s trial revealed that the divisions between the two firms were blurred. It became known that customers’ funds flowed from FTX into Alameda Research’s coffers, to pay off the trading giant’s enormous loan obligations and finance trades.
Gensler: Crypto Industry Rife With Fraudsters
Gary Gensler also warned of multiple bad actors in the crypto market and reiterated more work needs to be done to protect consumers.
“There’s no inherent conflict between crypto and securities laws,” Gensler opined. “The challenge lies in the fact that numerous global players are presently operating without adhering to these well-established regulations”. The SEC chair continued:
“Think about how many actors in this space are not complying right now with international sanctions and money laundering laws and are using crypto for nefarious or bad actions”.
At the Capitol, Minnesota Representative Tom Emmer introduced an amendment that he believes would put Gensler’s “pattern of regulatory abuse, a pattern that is crushing American innovation and capital formation” to an end.
