Significant Surge in FTX’s FTT Token Amidst Bankruptcy Rumors
The native token of the bankrupt exchange FTX, known as FTT, has experienced a remarkable surge of approximately 50% over the past day, driven by unfounded rumors regarding impending credit repayments.
Recent Performance Overview
As per data from CryptoSlate, FTT reached a peak of $2.75—marking its highest price since March—before retracting to $2.14 at the time of writing. This represents:
- A 56% increase over the past week
- A notable 71% rise in the last month
Moreover, trading volume for FTT witnessed a massive 1,600% increase, exceeding $360 million, with over half of this trading activity occurring on Binance.
Such a surge in value is quite unexpected given FTT’s limited use beyond speculative trading. Analysts suggest that this rise may be linked to developments surrounding FTX’s bankruptcy proceedings.
Debunking the False Repayment Speculation
Recent social media chatter falsely claimed that FTX would commence repayments to creditors and customers by September 30. However, these claims are unsubstantiated as the court has yet to approve any repayment framework.
Judge John T. Dorsey is set to oversee the next session discussing FTX’s restructuring plan on October 7. If the plan receives approval, those owed amounts less than $50,000 may see repayments starting late 2024, whereas claimants owed larger sums might have to wait until mid-2025.
Sunil Kavuri, representing FTX creditors, has also dismissed these rumors, emphasizing that repayments depend solely on the court’s sanction of the restructuring strategy. He stated:
“Certain large accounts are disseminating false information that FTX distribution has begun, or will commence on October 1, along with exaggerated claims of a $16 billion inflow.”
The Current State of FTX’s Repayment Plan
As it stands, FTX’s proposed repayment strategy is facing pushback from its creditors. This tension escalated following revelations regarding the company’s shareholder strategies.
Details from a recent court filing unveil that FTX’s debtors have earmarked 18% of the proceeds from government forfeitures for a designated fund aimed at certain shareholders, capped at $230 million.
This arrangement, which became public on September 27, was made without the creditors’ awareness, sparking outrage since they had already voted on the plan by the August 16 deadline.
According to Kavuri, the amended plan could leave creditors in a precarious position, recovering only 10-25% of their assets due to the basis of payouts being linked to the valuation on the petition date. He elaborated:
“This is a preliminary estimate of potential recovery based on the petition date—the current value of BTC is significantly higher than it was during that period.”