The price of FTT, the native token of the now-defunct cryptocurrency exchange FTX, has surged 60% to a high of $2.7Â as the exchange is close to initiating its repayment plan. At the time of reporting, FTT has settled at around $2.2, registering a 72% increase in the last 30 days, CoinGecko data shows.
There are rumors that the exchange’s victims may only receive 10% to 25% of their lost assets – no one knows for sure. After years of litigation, FTT holders must be looking forward to getting some real money.
FTT set a record high of around $84 in September 2021 amid the bull market. However, following a series of collapses throughout 2022, starting with the Terra ecosystem, the token plunged below $30 and extended its correction shortly after the FTX fraud was exposed.
The End of The Saga?
In March 2023, FTT hit its all-time low of $0.7. The recent surge comes as the cryptocurrency community members await the court confirmation on FTX’s proposed repayment plan, which will see at least 118% of claims to be repaid to 98% of its creditors.
The court hearing is scheduled for October 7, 2024. If the Bankruptcy Court for the District of Delaware approves the plan, creditor repayments will follow within 60 days since the effective day. If confirmed, smaller claims under $50,000 may see payouts by late 2024, while larger claims could extend to Q2 2025.
Ahead of the crucial court hearing, FTX’s restructuring team reportedly recovers over $16 billion from asset liquidations, which exceeds the initial expectations. However, full reimbursement faces criticism from creditors since the exchange plans to repay customers based on the prices of Bitcoin at the time of bankruptcy, estimated at below $18,000.
Apart from that, investors speculate that FTX creditors may only get 10% to 25% of their lost assets, according to a recent court filing shared by Sunil Kavuri, who represents the largest group of FTX creditors.
As outlined in the filing, 18% of forfeited funds, equivalent to $230 million, is set to distribute to FTX’s preferred shareholders who had equity in the company prior to its collapse. The allocation has stirred controversy among cryptocurrency holders as they believe it could lower creditor’s recovered funds.
Other than that, analysts suggest that the FTX’s $16 billion payout could create a bullish impact on the cryptocurrency market. Due to the fact that creditors will receive repayment in cash, around $5 to $8 billion worth of capital is expected to flow into the market post-approval, said Markus Thielen, the founder of 10x Research.
Key Figures Sentenced
The FTX drama is nearing an end after punishment was delivered to two of the heads behind the entity.
Last week, Caroline Ellison, the former CEO of Alameda Research, a trading firm closely tied to FTX, was sentenced 2 years behind bars for the part she played in the FTX fraud, a Manhattan court ruled.
US District Judge Lewis Kaplan, who oversaw Sam Bankman-Fried’s case, agreed with Ellison’s lawyers that she would get a lenient sentence after being a star witness during Bankman-Fried’s trial. Ellison had previously faced up to 110 years in jail.
Bankman-Fried, FTX’s former CEO, was previously sentenced to 20 years in prison after pleading guilty to multiple fraud charges in one of the largest financial frauds in American history. However, earlier this month, Bankman-Fried’s lawyers, on behalf of the disgraced mogul, filed an appeal to challenge his conviction.
Ryan Salame, the ex-CEO of FTX Digital Markets, is expected to serve 7.5 years in prison as soon as October 13, 2024. With all the jail time being handed out, victims must feel a little better.
Two other figures in Bankman-Fried’s circle, including Nishad Singh and Gary Wang, are awaiting their sentences, which are expected for October 30 and November 20, respectively. The two executives have pleaded guilty to charges related to their roles in the FTX fraud.
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USA Goldmines