FTX’s Revival Plan Fails, Promising Creditor Repayment: What Lies Ahead for FTT’s Price?
FTX, the bankrupt cryptocurrency exchange, has surprised its customers and creditors by assuring them that they will be able to recover their entire funds, as long as they can prove their losses. However, this announcement has had a negative impact on the FTT token, which initially saw a surge in price but later dropped by 15%, indicating uncertainty.
During a recent court hearing, FTX’s legal representative, Andrew Dietderich, expressed the company’s optimism about its ability to fully compensate valid claims from customers and creditors. The reimbursement strategy involves assessing cryptocurrency prices from November 2022, a crucial period when FTX faced financial turmoil. Despite the positive outlook, Dietderich acknowledged the complexities of the process, particularly in verifying the legitimacy of each claim and recovering lost funds.
While Dietderich made it clear that their optimism is not a guarantee but an objective, he also acknowledged the significant amount of work and risks associated with the compensation plan. However, he expressed confidence in the company’s devised strategy to overcome these challenges.
In addition, FTX has confirmed that it has no plans to restart its operations, putting an end to previous rumors. Dietderich dismissed any notion that the business was doing well and referred to the founder and former CEO, Sam Bankman-Fried, as a convicted felon responsible for creating an irresponsible sham.
FTX has faced a major challenge with over 36,000 claims amounting to approximately $16 billion. Initially, there were doubts about the company’s ability to repay everyone, with estimates suggesting it might only be able to pay back around 90% of customers. However, FTX’s outlook has become more positive, as they now believe they have enough money to fulfill all valid claims from customers and creditors.
Following FTX’s announcement about the repayment plans and decision not to restart the exchange, the price of their own coin, FTT, initially increased by over 11%. However, it later experienced a significant drop of 15% on Wednesday. Currently, the FTT token is valued at $1.87, representing a 30% decrease in the past 24 hours. This volatility reflects the uncertainty surrounding the future of FTX, especially considering the legal troubles faced by the CEO, Sam Bankman-Fried.
Did you know? Prosecutors have dropped the remaining charges against Sam Bankman-Fried, leading to an eruption of reactions within the industry.