FTX‘s dead token trading volume went up after receiving positive news from its creditors. This occurred in stark contrast to the end of 2022 when the exchange filed for bankruptcy, illustrated by brightening up the negative mood.
FTX Token Surges as Creditor Compensation Plan Boosts Optimism
Of course, FTX’s bankruptcy estate gained from the unyielding rise of crypto prices in its crypto holdings. By giving its shares in GBTC, its AI company called Anthropic, and its locked Solana tokens, the estate managed to sell some of it. This course of sales provided a means of repaying the debts. Certain actions were not considered the best ones (as with selling FTX’s stake and a token warrant in Mysten Labs for $96 million, which could have been worth more at a later stage), but the overall strategy has worked well anyway.
Read Also: Supporting Alameda Co-Former CEO Speaks in Favour of Ryan Salame’s Fair Sanctions.
FTX launched a rehabilitation plan last week that is geared towards a great reduction of the loss incurred by its creditors. According to the methodology used, creditors with claims not exceeding $50,000 would get 118 % of their allowed claims. Notably, other creditors are also set to receive full payment and still billions more for the delayed compensation of lost money. The cash, estimated to be around fourteen dollars, has been put into circulation. Five billion and $16. 3 billion. This situation has attracted FTX creditors whose claims are over 100 on the dollar, with the value reaching 109% as the matter stands.
Advertisement
FTX Creditors See Hope Despite Disputes
Despite the positive news, some of the creditors still need to be satisfied. Sunil Kavuri, the biggest creditors’ group leader, has criticized the compensation plan outspokenly. He states that creditors should be paid in which their debts are calculated using the cryptocurrency rather than the dollar value of their positions at the time of bankruptcy. However, Kavuri from FTX submits that the company has “destroyed an estimated over $10 billion” for creditors for the reason that asset values have increased since the fall.
On the same note, Thomas Braziel, a partner at 117 Partners and 507 Capital, is still optimistic. However, he reasons that the backlash will not hurt the plan as the majority of the assets are now owned by distressed investors, and they have been mainly stablecoin-based.
The upbeat movements of creditors of FTX have converted into good information for FTT, the terminal token currency of FTX. On the 08th of the month, the day the compensation plan was released, FTT recorded $139 mln in the spot volume, the highest since the end of December. The vision of the exchange’s reopening seems fictional at this point, and yet the current compensation plan has brought an optimistic variation of feeling about the creditors. These recent events represent a rebound for the creditors of FTX and also a demonstration of the resilience of the crypto market, undisputedly even in terms of significant challenges.
Read Also: Bitcoin Options Traders Anticipate Short-Term Price Correction
Maxwell Mutuma
Maxwell is a crypto-economic analyst and Blockchain enthusiast, passionate about helping people understand the potential of decentralized technology. He writes extensively on topics such as blockchain, cryptocurrency, tokens, and more for top publications such as Coingape, Coin Edition, and The Coin Republic. His goal is to spread knowledge about this revolutionary technology and its implications for economic freedom and social good.