Summary of Key Developments
All proposals aimed at reviving the FTX exchange, known as FTX 2.0, have been rejected. This decision signals a definitive shift in the estate's strategy towards finalizing cash repayments to creditors, ruling out the possibility of relaunching the exchange. Consequently, 98% of creditors are expected to recover over 118% of their claims based on 2022 valuations. The legal costs associated with the bankruptcy proceedings are approaching $1 billion.
FTX 2.0 Revival Scrapped
The proposed revival of the FTX exchange, FTX 2.0, has been officially abandoned following the rejection of all restart bids by the bankruptcy lawyers. This announcement marks a critical turning point in the estate's strategy, which will now concentrate on completing cash reimbursements to creditors, thereby ending any prospects of launching a new exchange. This decision affects numerous parties, including the FTX management team led by CEO John J. Ray III, the legal firm Sullivan & Cromwell, and Judge John Dorsey of the U.S. Bankruptcy Court for the District of Delaware. The rejection also encompasses proposals from three unnamed bidders who had submitted plans to reboot the exchange.
Key Stakeholders and Their Roles
The FTX management, under the leadership of CEO John J. Ray III, has been diligently focused on recovering and liquidating assets since the company's insolvency in 2022. Ray, who has a proven track record in managing bankrupt entities like Enron, has played a vital role in this process. Concurrently, the law firm Sullivan & Cromwell has managed the legal aspects of the proceedings, notwithstanding initial concerns regarding potential conflicts of interest due to their prior advisory relationship with FTX.
Judge John Dorsey, who presides over the bankruptcy proceedings, has been a central figure in the decision-making framework. In a courtroom statement, he emphasized the complexities of in-kind distributions, particularly noting the absence of the necessary cryptocurrency. Furthermore, creditors, represented by various committees, have voiced considerable dissatisfaction, especially concerning the perceived undervaluation of fiat repayments.
Financial Context and Market Impact
The rejection of the FTX 2.0 bids has not resulted in any new funding or institutional backing, indicating a complete transition to liquidation and fiat payouts for creditors. As part of the approved reorganization plan, 98% of creditors are slated to receive at least 118% of their claim value, calculated according to 2022 valuations. The cumulative legal and professional expenses related to the bankruptcy process have neared $1 billion since the initial collapse.
The prices of cryptocurrencies such as Bitcoin, Ethereum, and various altcoins have experienced no direct repercussions from this decision, as the planned reimbursements are exclusively in cash. Judge Dorsey reiterated that the FTX token (FTT) holds no intrinsic value and will not be part of any revival efforts.
Comparison to Previous Crypto Bankruptcies
FTX's current strategy aligns with the approaches taken in past cryptocurrency bankruptcies, including cases like Mt. Gox and other entities such as Celsius and Voyager. These firms also opted for liquidation and fiat payouts over attempting to relaunch their platforms. Such strategies frequently lead to discontent among original user bases, who often point to missed opportunities for investment gains.
No discernible changes have been observed in on-chain metrics, such as Total Value Locked (TVL) or shifts in liquidity, that can be directly attributed to the rejection of the FTX 2.0 bids. Given that most assets were liquidated or came under the control of the estate in 2022, the broader market impact remains minimal.
Creditor and Developer Sentiment
The creditor community has largely expressed negative sentiment regarding the decision, raising legal objections and financial concerns about the tax implications of fiat distributions. Despite these frustrations, no significant community actions or developments have emerged in response to the bankruptcy lawyers' decision to reject the FTX 2.0 proposals.
This outcome means the FTX token (FTT) is officially deemed worthless, with other assets like Bitcoin and Ethereum remaining unaffected by this recent development. The reliance on fiat-based reimbursements has precluded any direct influence on major cryptocurrencies or market dynamics related to FTX's remaining holdings.

