The repayment plan proposed by the restructuring team of the bankrupt cryptocurrency exchange FTX was approved at a confirmation hearing in the Delaware Bankruptcy Court on the 7th. In the future, small creditors with claims of less than US$50,000 are expected to start receiving compensation before the end of 2024, while creditors with larger claims may have to wait until the first or second quarter of 2025 to receive compensation.
Details such as the effective date of the subsequent payment plan and the expected start time of distribution are subject to separate announcement by the FTX reorganization team, which was previously estimated to take two months.
FTX starts to dump the market?
However, according to on-chain analyst Yu Jin’s monitoring, FTX/Alameda’s SOL staking address H4y…gFZ redeemed 178,631 SOL (about 28 million US dollars) this morning ($23.75M), and may transfer SOL to CEX for sale later. Currently, there are 7.09 million SOL (about 1.107 billion US dollars) staked at this address.
According to previous transfer records, these redeemed SOL will be distributed to multiple addresses, most of which will subsequently flow into Coinbase or Binance.
Image source: solscan
In fact, the SOL transfer of this address is relatively regular at present. It will be redeemed between the 12th and 15th of each month, and about 170,000 SOL will be transferred out. Lookonchain has previously released data showing that from July to September this year, FTX/Alameda has unstaked 530,000 SOL and transferred them to multiple addresses, with an average of 176,700 SOL unstaked per month.
It is speculated that FTX's move is in preparation for repayment, which may put SOL under selling pressure. However, some analysts previously believed that FTX/Alameda's actions would not have a significant impact on the price of SOL, because the scale of unstaking is relatively small compared to the total wallet holdings, and FTX's selling is expected to be carried out through over-the-counter (OTC) transactions, thereby reducing the possibility of drastic market fluctuations.
As FTX redeemed 178,631 SOL today, the price of SOL was not affected, rising 2% to $154.80 in the past 24 hours.
SOL price trend. Source: Coingecko
What is FTX’s repayment plan?
According to previous reports by Dynamic Zone, the core content of FTX's bankruptcy plan is to use its recovered funds to compensate users first, and then pay potential competing claims filed by government regulators. Based on the type of creditor claims, the vast majority of customers (creditors holding amounts below US$50,000) can receive approximately 118% of their loss compensation, and some creditors can receive 142% of their loss compensation.
According to the reorganization plan FTX filed with the Delaware Bankruptcy Court in May, the company estimates that it will have as much as $14.5 billion to $16.3 billion in cash available for distribution once all assets are sold.
However, it should be noted that future compensation for losses will be calculated based on the U.S. dollar price of cryptocurrency on the day FTX exercises Chapter 11 of the Bankruptcy Law on November 11, 2022, so unless the assets placed by the user in FTX are stablecoins, it is actually still a big loss.
