Recent news alluding to a possible led to a lot of chatter in crypto circles, resulting in the emergence of quite a few myths and misunderstandings about what FTX 2.0 would mean.  The objective of this article is to provide further info, so people have a better understanding of the implications of a rebooted FTX business. FTX exchange reboot Through his ongoing diligence relative to this bankruptcy process, the FTX 2.0 Coalition’s sleuthed his way through the latest monthly fee statements, uncovering strong indications of a possible FTX exchange restart. His tweet, pushed out on May 22, sparked quite a bit of coverage in crypto media and debate on Crypto Twitter and elsewhere. ‘AFTX Creditor’ Let’s go through all of those concerns and objections. 1. FTX2.0? Hell No! FTX is a fraud It’s beyond doubt that the was damaging,  be that for the 1.4 million creditors that are currently out of pocket, crypto projects that suffered reputational damage due to ties with FTX and Sam Bankman-Fried (SBF), or simply for anyone who had an open crypto position in early November 2022, given that the market tanked at that time. collapse of FTX 1.0 Additionally, the crypto sector as a whole has suffered reputational damage and the FTX collapse has provided a great excuse for those opposed to decentralized money and systems to push for heavyhanded regulation. I understand that those wounds are fresh but all of what happened relates to FTX 1.0. The ‘ ’ is out! They’re going to be rotting in jail as FTX 2.0 powers on. The likelihood is that 1.4M creditors will take a share in the ownership of the new business. Most likely it will be taken forward by an external entity capable of handling crypto exchange operations and injecting cash into the business. That means no FTX 1.0 C-Suite executive involvement with FTX 2.0. The business will get a clean break, and will be totally disassociated from its fraudulent past ways. polycule 2. The brand is tarnished beyond repair For the most part, this take refers to the viability of the business but from the views I’ve seen expressed, it's also a more general objection as people see FTX as damaging to the broader space. One response to that is that we have an opportunity to turn this narrative around. What could be better than taking the thing that caused havoc for so many stakeholders in crypto and turning it into a positive element? Wouldn’t a successfully resurrected FTX achieving optimized recovery for 1.4 million creditors be demonstrative of a crypto sector that cleans up its own mess? As regards the branding itself, essentially this is an item that whatever entity takes on FTX 2.0 needs to consider. Sure, there is an element of risk in maintaining the FTX brand. But there’s also an opportunity. It costs countless millions to make a brand a household name. While many may find it distasteful, FTX is a well recognized brand. The following is an excerpt from the , a survey that aims to gauge the reputations of the most visible brands in America. 2023 Axios Harris Poll 100 The first thing to say is that it costs millions in marketing outlay to make that list. Not surprisingly, FTX finds itself at the tail end of that list right now. However, it’s right there alongside Bitcoin and . If crypto people are reading this, then the odds are that you highly regard Bitcoin and Twitter. People outside of crypto don’t according to the survey. Does that mean they’re done for?  Of course, it doesn’t. Twitter 3. FTX must die!..for the good of crypto The knee-jerk response from most people in the crypto space has been to immediately consign FTX to the past and move on. I understand the logic but I don’t believe it is the way. The right way to move forward for an industry pockmarked by fraud, hacks, and rug pulls is total transparency. There’s a lot that can be learned from catastrophes like FTX 1.0. If that’s the case, isn't it better not to sweep it under the carpet? Take the analogy of the Mt.Gox collapse as an example. A painful passage in crypto’s history but some good things came out of it. It led to regulation that protected customers, evidenced by the fact that FTX Japan customers have been enabled in withdrawing all of their funds. Secondly, is it really ‘for the good of crypto’ to burn 1.4 million FTX creditors and crypto space peers? All other things being equal, I can’t see that as being a positive outcome. FTX 2.0 represents the best opportunity for creditors to optimize recovery. Naturally enough, many creditors have said they’re done with crypto permanently. Are we trying to grow adoption and participation in the crypto-verse or are we trying to turn people off it? Perhaps you may come to the conclusion that you don’t have a use case for FTX 2.0 but everything else being equal, wouldn’t it be in the interests of the industry as a whole (and therefore you too) to at least be open to the idea? 4. Trust FTX 2.0? That’s a hard no! The past week has seen countless instances of folks on Crypto Twitter suggesting that FTX 2.0 can’t be trusted. Much of that is rooted in a belief that FTX 2.0 will simply carry on from where FTX 1.0 left off but it won’t: FTX 1.0 ≠ FTX 2.0 Yes, the FTX brand has an image problem. However, I can’t imagine, given what has happened, that FTX 2.0 would mirror the previous service offering of FTX 1.0 when it comes to customer protection. That may be an assumption on my part but I think it’s a reasonable assumption. The clear route for whatever entity steps in to drive FTX 2.0 to take is to move from a platform that totally disregarded customer protections and overcompensate to the other end of that spectrum. That would involve at a very minimum, properly segregated customer and corporate funds and the use of an institutional-grade custodian, and most likely greater clarity and protection written into any terms of service. 5. We don’t need it Ok, so let's refresh ourselves as regards what centralized exchange (CEX) options are available to us. Coinbase: Are you happy to pay well above the odds on fees anon? The bulk of FTX users were active traders. Fees matter when you’re constantly trading in and out of crypto positions. Binance: Is it seriously in the interests of the industry to leave the bulk of global crypto trade in the hands of this one entity? Binance and Changpeng Zhao (CZ) find themselves firmly in the cross-hairs of multiple authorities around the world. You can form an opinion on that being right or wrong but accepting it’s a threat, what happens to the crypto space if the powers that be find a way to push it out of business round about now when it accounts for the bulk of global crypto trading? We’ve had to find out the hard way but FTX has well and truly outed all of its skeletons. But what of Binance? There are serious question marks hanging over the global crypto exchange. There have been allegations of similar practices happening behind the scenes at Binance as happened at FTX 1.0. Heck, we don’t even know where Binance is headquartered! Still, if the feds don’t take Binance down and despite all the uncertainty, the exchange turns out to be squeaky clean (although when would we ever know?), even then is it healthy for crypto to have one dominant CEX? Bybit: With mandatory KYC, do you want to give the CCP your personal data? Kucoin and OKX: Aren’t these just shady bucket shops? Given what has transpired, I can understand a reluctance to use FTX 2.0 but wouldn’t it still be more progressive to let it run and see how it embraces the market (and vice versa)? There’s every reason to believe that the market would benefit from the optionality of a regulated, transparent and well functioning CEX. 6. Fuggetaboutit! DEX, not CEX. Some crypto folk have pointed out that decentralized exchanges (DEXs) are the way forward and on that basis, in no way should FTX 2.0 be considered. I don’t think there’s anyone in crypto who doesn’t see the ongoing development of DEXs as anything other than a positive move. But do they cover all users and use cases? Everything is easy when you know how and dependent upon your competence level. DEXs are an ongoing innovation but in no way do they fulfill all needs today. No doubt there are users out there who are confident that a DEX fulfills all of their needs and there’s no going back. I get that, but in the interests of facilitating mass adoption of crypto (which I believe is something that we all want), would you stand in the way of an improved iteration of a regulated CEX? . Centralized exchanges are here to stay

The is an opinion piece based on the author’s POV and does not necessarily reflect the views of HackerNoon.

Dispelling 6 Objections to FTX 2.0

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