- FTX token surged 113% but corrected, was trading 31.53% higher at $2.14.
- FTX creditors may only recover 10-25% of their cryptocurrency holdings, per updated documents.
Rumors have been swirling on social media suggesting that FTX’s bankrupt crypto exchange would begin distributing reimbursement funds to creditors and customers by the 30th of September.
However, these claims are false, as no court has approved the reimbursement plan yet.
The story so far
So, for those unaware, initially, in May, FTX had stated its intention to fully repay creditors, with some expected to receive more than 100% of their claims.
However, on the 28th of September, FTX creditor Sunil Kavuri revealed that updated bankruptcy documents now indicate creditors may only recover between 10–25% of their cryptocurrency holdings.
This rumor gained traction online, as noted by X (formerly Twitter) user Crypto Rover, who highlighted,
Source: Crypto Rover/X
What’s the reality?
However, as per the latest Chapter 11 filing, the next court hearing to confirm FTX’s restructuring plan is scheduled for the 7th of October, with Judge John T. Dorsey from the United States Bankruptcy Court for the District of Delaware presiding.
If the plan is approved, claimants with claims below $50,000 could potentially start receiving payments by the end of 2024.
However, those with larger claims may face longer waiting periods, with distributions expected to be delayed until the first or second quarter of 2025.
The community weighs in
Remarking on the same, Sunil, an FTX Creditor Champion, took to X and noted,
Source: Sunil/X
Adding to the fray was another X user who said,
“No they won’t.”
How will the market react?
Under the current distribution plan, creditors will be reimbursed based on the value of Bitcoin [BTC] at the time the legal petition was filed. At that time, the value was approximately $16,000 per BTC.
As a result, creditors and former customers would only receive around a quarter of their original holdings, as Sunil Kavuri noted.
However, some market analysts believe this payout could have a bullish effect on the cryptocurrency market.
Markus Thielen, founder of 10x Research, in his research report, suggested that the reimbursement could lead to a $5 billion to $8 billion capital inflow, potentially driving up demand and prices.
Sharing a similar line of thought was a crypto trader and investor Sheriff who noted,
“More inflow.”
FTX Token price action
Meanwhile, FTX Token [FTT] experienced a notable surge, soaring by 113% during an intraday high on the 29th of September.
Despite a correction later in the day, FTT still closed 57% higher than its opening value. This sparked speculation among investors about its future trajectory.
As of the latest data from CoinMarketCap, FTT remained up by 31.53%, trading at $2.14, leaving market participants curious about the token’s potential in the coming weeks.
