Scrapped FTX relaunch raises alarm over legal team’s profits

Former SEC official John Reed Stark described the FTX reorganization plan as a “highway robbery of highway robbers.”

Former United States Securities and Exchange Commission (SEC) official John Reed Stark has suggested that the FTX restructuring plan might be a way for the legal team to profit from the bankruptcy process.

In a post on social media platform X, Stark said all FTX customers should receive a sarcastic “Thank You” note from the defunct exchange’s legal team, given the substantial profits it made during bankruptcy proceedings. Stark also sarcastically quipped that each legal team member might be able to afford a new beach house in 2024.

During a Jan. 31 hearing in the U.S. Bankruptcy Court for the District of Delaware, FTX lawyer Andy Dietderich of Sullivan & Cromwell clarified that, despite extensive efforts, there were no plans to relaunch FTX — known as FTX 2.0 — in the Chapter 11 bankruptcy framework.

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