FTX Abandons Plans to Revive Exchange: FTT Reacts With Significant Drop
FTT has dropped 23% in the last 24 hours amid FTX's decision not to relaunch the exchange.
FTX lawyers said the exchange is abandoning its original plans to relaunch the platform in favor of paying out funds to affected customers. Users are also not interested in FTX's relaunch.
FTX declared bankruptcy in 2022, citing a liquidity crisis resulting from the fraudulent machinations of now former CEO Sam Bankman-Fried. The Chapter 11 litigation is still ongoing. At the most recent hearing, the company's lawyers shared their current plans, which include a gradual return of funds to customers through asset sales.
What you thought you were buying: BTC
— Scott Johnsson (@SGJohnsson) January 31, 2024
What you were really buying: BTC puts at generational lows from a bankrupt counterparty
FTX estate: "Everyone will get paid in full" https://t.co/IBMrkQn8MA
According to lawyer Andy Dietderich, FTX plans to reveal full details of how customers will receive their payouts in February. He also confirmed that initial plans to find a new buyer for FTX with its subsequent relaunch had "disappointed" executives, as the company had not found any interested investors or buyers. The reason, according to the lawyer, was the disastrous position of FTX at the time of its collapse, which never achieved relevance in its short period of existence. He also noted the failed leadership and Sam Bankman-Fried, who was convicted on federal fraud charges in November 2023.
Amid the news, the FTT token fell 23% and was trading at $2.01 at the time of writing.
Source and Copyright © TradingView
The judge in the FTX bankruptcy case on Wednesday ordered that affected customers and creditors be paid exactly what they lost when the exchange collapsed in 2022. However, many protested the ruling, citing that tying claims to cryptocurrency prices in 2022 would deprive them of the value of those assets, which has risen since FTX's collapse.
By some estimates, affected customers around the world will receive more than 90% of the distributed value if the bankruptcy court approves the amendment plan by the end of 2024.
In June, the exchange's new CEO, John J. Ray III, said the company had "begun the process of soliciting interested parties to the reboot of the FTX.com exchange." The platform was expected to rebrand, but recent court filings have made it clear that despite the efforts of the exchange's new team and and other monetization solutions, it has been unable to find investors willing to provide the necessary capital to relaunch the offshore exchange.
