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Jesse Powell, the founder of the cryptocurrency exchange, Kraken, ignited a furor within the crypto world with his disparaging comments on the revival plans for the cryptocurrency exchange, FTX 2.0. He stated that pursuing FTX 2.0 would be “worse than starting from scratch,” pointing to the absence of a team, technology, licenses, and banking, not to mention a tarnished brand.
Kraken Founder Not In Support Of FTX 2.o
The Kraken founder added that the platform has “no team, no tech, no licenses, no banking” and is weighed down by a “tarnished brand.” He urged the trustee to auction off FTX’s domain and trademark, branding any further action as a “fee extraction attack on delusional creditors.”
Continuing the critique, others in the community also asserted that a tainted reputation is detrimental for financial services, implying that FTX 2.0’s infamous image could dissuade traders. He likened potential users of FTX 2.0 to those willing to trust “Madoff enterprises” or switch their WiFi to “Enron Wifi.” He dismissed FTX 2.0 as a “hopeless dream” or a scheme for “malicious self-promotion.”
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Arguements From The Other Side
FTX 2.0’s advocates were quick to defend their vision. In response to Powell’s comments, the FTX 2.0 Coalition, via their Twitter account, suggested that the troubled exchange should be transferred from lawyers’ hands to a “competent operator with the necessary experience, resources, and creditor alignment.”
The Coalition further emphasized that the 1.8 million creditors-turned-owners could be a valuable resource for bootstrapping the platform. It hinted at the widening gap in the offshore derivatives market, highlighting that the current top exchange is in trouble and alternatives are scarce.
According to the FTX 2.0 plan, non-cash remuneration in the form of equity securities, tokens, or other interests could be given to creditors by FTX 2.0. Put another way, rather than getting paid in cash, the creditors would get stock in the new exchange firm.
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