FTX’s image has collapsed and reconstruction is not feasible
According to Reuters, Andy Dietderich, a lawyer representing FTX, said that the company's founder Sam Bankman-Fried (nicknamed "Chip Bro") failed to establish the necessary technology and management systems for FTX, which he described as an irresponsible scam created by a convicted felon. Therefore, the cost and risk of rebuilding FTX into an effective trading platform are too high. The company will choose to sell assets to compensate affected customers.
Dietderich also mentioned that FTX has recovered more than $7 billion in assets and reached agreements with multiple government regulators. The company plans to try to recover about $9 billion in claims after ensuring that customers are fully compensated.
The amount of compensation may depend on the price during the "crypto winter"
According to previous statements by the FTX bankruptcy liquidation team, the value of creditors’ cryptocurrency assets will be based on the market price on November 11, the day FTX filed for bankruptcy. Since the price of cryptocurrency at the time was much lower than the current market price, this could cause creditors to lose up to several times their potential gains under the court-approved plan.
In other words, if you owned 1 Bitcoin when FTX filed for bankruptcy, you would have received $16,000 in compensation instead of the $43,000 you have today.
The bankrupt cryptocurrency exchange FTX has recently made progress in its liquidation process. According to the latest news from the court hearing, FTX is expected to fully compensate its cryptocurrency customers in the bankruptcy liquidation. At the same time, lawyers said that despite the company's months of negotiations with potential bidders and investors, no one was willing to invest in rebuilding the FTX exchange.
FTT plunged nearly 18% in 24 hours
The market was originally optimistic about FTX restarting the exchange. Yesterday (31st), the price of FTX's platform currency FTT rose from around $2.65 to $2.99. However, as the hearing revealed that FTX would give up restarting the exchange, the price of FTT fell sharply in just 10 minutes, from nearly $3 to $2.29, a drop of more than 25% in a short period of time. At the time of writing this article, the price of FTT continued to drop, quoted at $1.89, and the drop in the past 24 hours was still 17.86%.
FTT is facing the risk of collapse. The founder will step into the sewing machine, the team will be disbanded, and the market is brewing just for this wave of sprint. The currency with stains will not rise in this wave, and it will be even more difficult in the future. In the end, no one will manage it and it will be offline. There is only sentiment for FTT. It is useless now. There is still a long future. It is not ruled out that some institutions will resume FTT in the future. #FTT
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