Over a year has passed since the FTX collapse devastated the cryptocurrency markets at the end of 2022. While the duration of SBF’s imprisonment will be determined in the upcoming year, creditors have yet to recover their assets. A new step has been taken to expedite the process, leading to a resurgence in the value of the FTT Token.
It is important to note that the likelihood of the FTX exchange reopening is slim and the FTT Token is unlikely to be featured in any new exchange. The recent 20% surge in the token’s value was triggered by the agreement between FTX Trading Ltd and FTX Digital Markets to collaborate on the return of customer assets.
The agreement is part of a Global Settlement Agreement signed today, which, if approved by both courts, will be a component of the Chapter 11 restructuring plan. The process is expected to accelerate following the approval of the revised restructuring plan proposed by creditors on December 16, 2023. However, the clause regarding payments in dollars may prove to be frustrating for creditors.
John J. Ray III, the Chair of the FTX Bankruptcy Committee, expressed excitement about reaching a settlement that is favorable to the customers’ interests, while also respecting the significant role that the Joint Official Liquidators and the Bahamas will play in the global recovery efforts. He acknowledged the unique challenges posed by conflicting applications between FTX Creditors and FTX Digital Markets.
The FTT Token is experiencing a speculative surge, trading above $4.2 at the time of writing. The agreement includes pooling assets to ensure FTX.com customers receive distributions simultaneously and coordinating the timing and amount of distributions. It also involves harmonizing approaches to valuing FTX.com customer claims to minimize potential disputes and evaluating all FTX.com customer claims related to cash or digital assets (excluding NFTs) in U.S. dollars based on petition date prices, without adjustments for post-petition price fluctuations. FTT interests against FTX Creditors and FTX Digital Markets will be considered equity with no repayment.