FTX is moving ahead with efforts to revive its flagship international cryptocurrency exchange, even while its reputation continues to take a hit as new managers shed light on how they say nearly $9 billion in customer funds were stolen before the company’s collapse last year, WSJ Pro Bankruptcy reported. The company “has begun the process of soliciting interested parties to the reboot of the FTX.com exchange,” said Chief Executive John J. Ray III, who took over in November when it filed for bankruptcy. The failed crypto company has been holding early talks with investors about backing a potential restart of the FTX.com exchange through structures including a joint venture, people familiar with the discussions said. FTX would likely rebrand as part of any restart, these people said. The talks include possible compensation for certain existing customers, possibly by offering them stakes in any reorganized entity, the people said. Blockchain technology company Figure has indicated its interest in helping back a restart of FTX, people familiar with the matter said. Figure was part of an investment group that bid for the rights to restart Celsius Network, another bankrupt crypto business, but lost out to a consortium backed by Fortress Investment Group.
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In related news, bankrupt cryptocurrency exchange FTX sued one of its former top lawyers, accusing him of aiding fraud by company founder Sam Bankman-Fried and silencing whistleblowers who reported wrongdoing at the company, Reuters reported. The complaint, filed on Tuesday in U.S. Bankruptcy Court in Delaware, describes Daniel Friedberg, a former chief compliance officer at FTX and general counsel of its related crypto hedge fund Alameda Research, as a "fixer" for Bankman-Fried and other FTX executives who enabled the "wholesale raiding" of customer funds. Friedberg “whitewashed” complaints from employees raising concerns about the activities of FTX and Alameda by settling claims for “inflated” amounts and in some cases hiring law firms that represented whistleblowers to perform legal work for FTX, the company said. The settlement amounts are redacted in the complaint.
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