Last November, failed crypto exchange FTX announced the appointment of John J. Ray III as the firm’s new CEO a few days after the company’s founder, Sam Bankman Fried, resigned. Before his current position, Ray had handled the aftermath of numerous big brands that collapsed.
Learn everything about John. J. Ray III in this article and why some people are convinced that he is the right person to lead FTX to a fresh start.
Meet John J. Ray III
Ray has a 30-year experience in the legal sector. He is nicknamed the “turnaround titan” as he has helped several bankrupt companies to restructure. Ray was born in Pittsfield, Massachusetts and lived there during his early years. He went to the University of Massachusetts, where he pursued a Political Science degree. He later joined Drake University to pursue a law degree. Ray started his career journey at a small account company before Mayer Brown, a popular law firm, hired him.
What John J. Ray Does
Ray started dealing with corporate bankruptcies at a well-known clothing manufacturing firm, Fruit of the Loom. In 1998, he was appointed as the firm’s general counsel. However, a year later, Fruit of the Loom filed for bankruptcy, and Ray became its Chief Administrative Officer. At the time, he spearheaded the sale of various assets to investment company Berkshire Hathaway and filed a lawsuit against the former Fruit of the Loom CEO.
After he successfully led the bankruptcy proceedings for the clothing manufacturer, Ray founded his company, Avidity Partners, to handle corporate bankruptcies. Since then, he has been contracted by several corporations to lead their insolvency proceedings, including Residential Capital, Enron, Nortel, and Overseas Shipholding.
Importance of John J. Ray
Ray’s reputation for helping struggling firms restructure earned him the appointment of CEO at FTX. He assumed office a few days after the crypto exchange filed for bankruptcy. He now oversees the proceedings. Ray’s appointment is massive, considering he is a respected professional in the restructuring space. This instills confidence in creditors, investors, and customers.
History of FTX
FTX began its operation in 2019 under the leadership of Sam Bankman-Fried. It quickly grew to become one of the biggest crypto exchanges by trading volume. In August 2021, popular investment company Temasek injected $25 billion into FTX. The following year, the trading platform’s value had increased to $32 billion.
Around October 2022, interest rates started surging, leading to a banking crisis in the United States, which affected all sectors, including crypto. A month later, the world was shocked to learn that FTX had been one of the leading crypto scams witnessed in recent years, as the US Securities and Exchange filed a lawsuit against Bankman-Fried, accusing him of defrauding FTX customers.
He then resigned, and Ray replaced him. Last December, authorities arrested Bnakman-Fried in the Bahamas. His associates, Caroline Ellison and Gary Wang, were also arrested in the US. The two have since pleaded guilty to all the charges leveled against them.
Meanwhile, Bankman-Fried is being detained at the Metropolitan Detention Center after his bail was revoked in August 2023 over allegations that he was tempering with witnesses.
Here’s the series of events that led to FTX’s downfall:
November 2, 2022: Crypto news company CoinDesk leaks FTX balance sheet showing the exchange’s liquidity crisis.
November 6, 2022: Binance boss Changpeng Zhao announces on his X account that his company was looking to cash out its FTT tokens.
November 8, 2022: Zhao and Binance express interest in acquiring FTX.
November 9, 2022: Binance announces it has decided against purchasing FTX.
November 11, 2022: FTX files for bankruptcy as Bankman-Fried resigns as firm’s CEO.
November 22, 2022: FTX appoints John J. Ray as its new CEO.
Since Ray’s appointment, over $7.5 billion in liquid cryptocurrencies and cash has been recovered. The figure still falls short of the $8.6 billion owed to the FTX users.
Meanwhile, Ray has hinted at the restart of the crypto exchange. However, crypto experts say it may take at least three years for FTX to start operations.
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