SkyBridge Capital founder and former FTX backer Anthony Scaramucci has argued that restarting the failed exchange is impossible.
The hedge fund magnate said that a decline in profitability has seen exchanges burn through private funds, making a restart highly unlikely.
SkyBridge Founder Questions FTX Restart in Bear Market
“I don’t see how it’s possible to restart FTX,” he said in a recent interview. “Not a lot of money is being made on these exchanges right now, and so a lot of these exchanges are in the red.” He said that exchanges are using privately-raised capital to survive while waiting for an uptick in trading volumes during the next bull market.
Scaramucci argued he could not see many positives in a reboot.
“But you know, I’ve been wrong about so many things,” he conceded. He also pointed out that creditors would need to approve any restart.
FTX filed for bankruptcy on Nov. 11 2022, after a confidence crisis in the exchange’s FTT token sparked a bank run and sped up the exchange’s insolvency. Its bankruptcy lawyers have been working to recover funds to reimburse FTX creditors.
FTX CEO John Ray first floated the idea of a possible reboot in January. He argued that rebooting the exchange would reimburse FTX creditors quicker than bankruptcy proceedings.
FTX lawyer Andy Dietderich said in April 2023 the firm might require external funding or asset sales to reboot. He admitted that the exchange’s current presentation was little more than a facade.
SkyBridge Eyes FTX Negotiations if Restart Successful
Scaramucci, who was a former White House Communications Director under President Trump, sees a successful relaunch of FTX as a net positive for SkyBridge.
“That will mean that they’re profitable, and we will, hopefully, be able to negotiate with them,” he surmised.
SkyBridge, whose assets have fallen from $9 billion in 2015 to $2 billion at press time, invested $10 million in Bitcoin and $10 million in three other cryptocurrencies related to former boss Sam Bankman-Fried, including FTX’s native FTT token.
In August 2022, Bankman-Fried said an FTX unit would buy a 30% stake in SkyBridge. After unsuccessfully trying to offer assistance to Bankman-Fried, Scaramucci later told CNBC he would buy back the equity.
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Source: https://beincrypto.com/scaramucci-ftx-reboot-nigh-on-impossible/