FTX pledges full customer reimbursement but announced no plan to restart the platform.
FTX’s native token, FTT, surged then sharply declined in response to the restitution plans.
FTX, the troubled cryptocurrency exchange under the leadership of Sam Bankman-Fried, has announced its intention to entirely reimburse customers and creditors affected by its bankruptcy proceedings. The company assured the judge overseeing the case that individuals who can substantiate their losses are poised to recover their entire investments.
However, the prospect of full asset recovery comes with a red flag. The reimbursement values are pegged to the point of FTX’s official declaration of bankruptcy, a period marked by volatile market conditions. This condition, endorsed by U.S. Bankruptcy Judge John Dorsey, highlights the complexity of the situation.
NO FTX 2.0?
Andrew Dietderich, a legal representative, emphasized the strict scrutiny required to discern legitimate claims among the many submissions. This meticulous assessment process aims to sift through millions of claims and safeguard the integrity of the reimbursement procedure.
Further, he highlights that FTX has now prioritized compensating former clients over relaunching its platform, known as “FTX 2.0,” due to a lack of buyers, as confirmed during court proceedings.
With Dietderich’s announcement, FTX’s native token, FTT, experienced a short surge of over 20% from $2.5 to $3.01 in response to the company’s restitution plans. However, the optimism was short-lived. FTT promptly plummeted, registering a 31% decline for the day, and is currently trading at $1.81.
FTX Token (FTT) Price Chart (Source: CoinMarketCap)
Meanwhile, the legal woes of Sam Bankman-Fried continue to mount, with a conviction on seven felony counts tied to fraud at FTX and Alameda Research. Bankman-Fried’s sentencing, scheduled for March 28, adds another layer of complexity to FTX’s deafening saga.