FTX: Customer Refund Plan Approved

By Negativeland | Negativeland | 8 Oct 2024


FTX bankruptcy plan approved, full refund in FIAT currency for customers at November 2022 prices.

 

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The Repayment Plan

On Monday evening, a Delaware court judge approved a refund plan for customers of FTX, the exchange that filed for bankruptcy in November 2022.

Under the plan, 98% of customers will receive a refund of between 118% and 140% of the capital deposited on the platform. Payments will be made in FIAT currencies, as expected.

Refunds will be processed within 60 days of the plan going into effect, a date not yet set.

However, not all that glitters is gold. The value of the refund will be calculated based on the value of the assets at the time of bankruptcy, in November 2022. On that date, November 11, Bitcoin was trading around $17,000. Therefore, while the plan provides a bonus on the original amount, customers will see a refund of just over 25% of the current value of their lost assets.

 

Several objections during a 6-hour hearing

The plan, approved less than two years after the bankruptcy, was made possible thanks to the work of the liquidators, who recovered the assets. The increase in value of the assets held by FTX and Alameda also played a key role.

Despite the positive outlook, some objections were raised during the hearing. The first concerns the method of reimbursement in FIAT currencies instead of cryptocurrencies. The second objection concerns the value attributed to the platform's FTT token. Both were rejected: the judge ruled that the nominal value of the FTT token is zero.

 

FTT's reaction and a stablecoin refund?

“Experts have explained that FTT has no intrinsic value and no utility outside of a functioning exchange,” Glueckstein said. “There will be no reboot of FTX.com.”

Following the news, the FTT token soared 70%, from a low of $2 to a high of $3.4, before falling back to below $2.5.

Finally, the possibility of a refund via stablecoin has been considered, although this option is still being evaluated. The U.S. Securities and Exchange Commission has raised numerous objections to this method.

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Negativeland
Negativeland

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