Home CryptocurrencyAltcoin According to observers, the FTX reboot could slow down due to long-term eroded user confidence

According to observers, the FTX reboot could slow down due to long-term eroded user confidence

by SuperiorInvest

Several crypto industry commentators have expressed skepticism about FTX CEO John Ray’s vision to potentially reboot the crypto exchange, citing trust issues and “second-rate” customer treatment as some of the reasons why users may not “feel safe coming back.”

Former FTX CEO Sam Bankman-Fried took to Twitter on January 20 to praise John Ray for looking at restarting FTX, suggesting it was the best move for his customers.

This comes after John Ray told the Wall Street Journal on January 19 that he considered reviving the crypto exchange as part of its efforts to keep users whole.

Ray noted that despite the fact that top managers were accused of a crime, stakeholders have expressed interest in the possibility of a return to the platform – they see the exchange as a “viable business”.

In comments to Cointelegraph, Binance Australia CEO Leigh Travers believes it will be difficult for FTX to re-license, especially as the industry moves into a new year with increased regulation and regulatory oversight.

Travers also noted that since the shutdown, FTX users have migrated “to other platforms like Binance.” He questioned whether those users “will feel safe to return.”

It addressed the fact that FTX’s governance and controls had been called into question, with administrators sharing details of some clients receiving “preferential treatment”, including “backdoor switches”. Travers noted:

“How will users feel comfortable returning to a platform that has treated some clients as second-rate?”

Digital asset lawyer Liam Hennessy, a partner at Australian law firm Gadens, thinks it would be “very difficult” for FTX, given its damaged reputation and lack of trust, for any customer or investor to “approach them again”.

Hennessy was also skeptical that FTX would ever be approved for a license again, saying it was “one big question mark” that depended entirely on the jurisdictions.

The lawyer believes that in some offshore jurisdictions it will be easier for the exchange to get a license approved, but there will be no point if its users are not going to come back.

“Jumping through the hoops set by major jurisdictions such as the US, UK and Australia will be a serious challenge.”

Related: FTX Recovers Over $5 Billion in Cash and Liquid Crypto: Report

Meanwhile, Aaron Lane, Aaron Lane, Aaron Lane, Aaron Lane, Aaron Lane, told Cointelegraph that he is “not surprised” that FTX is considering reviving the exchange business, saying that’s the purpose of the Chapter 11 process — to give the company an opportunity propose a plan to run the business and pay off creditors “over time with court approval.”

He believes “the burden will be on FTX” or a creditor filing a competing plan to show that creditors will achieve a “better result” under a recovery plan compared to a liquidation of FTX’s assets.

However, Lane also questioned whether customers would ever trust FTX again, saying it was possible that another company looking to launch a new exchange would “leverage those assets” rather than develop their own interface from scratch.

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