In a remarkable turn of events, the erstwhile cryptocurrency firm, FTX, has rolled out a comprehensive reboot plan. This sweeping strategy aims at reimbursing virtually its entire customer base, a move that has consequently ignited an impressive ascension in the value of their native token, FTT. Over the course of seven days, the cryptocurrency observed an upward trajectory of a staggering 52%, peaking this past Wednesday morning at an all-time high of $2.29.
The restructuring, albeit belated, sought to rectify FTX’s outstanding debts, which, according to the plan finalized late Tuesday, approximated around $11.2 billion. The coin exchange firm, however, currently holds assets totaling somewhere between $14.5 billion and $16.3 billion, a portion of which they intend to apportion amongst their myriad of creditors.
The proposed plan is structured with a clear bias towards the lesser stakeholders, with customers who claim a loss of $50,000 or less slated to receive a generous 118% of the amount claimed. This payout is projected to extend to nearly 98% of all affected parties, liberating the once locked-in customers from their financial anxieties. This welcome reprieve arrived months after the company’s bankruptcy protection filing in November 2022.
A twist worth noting is that, in contrast to the common practice, FTX was unable to tap into the earnings from the unaccounted tokens during their chapter 11 proceedings. Hence, the firm had to explore other possible sources of recoverable wealth to settle its debts.
Post the sudden exit of the founder, Sam Bankman-Fried, FTX ushered in John Ray III to the commanding role of CEO. Ray prefaced his revolutionary strategies with a biting indictment of the company’s lack of oversight, lamenting over FTX’s “complete failure of corporate controls,” and the shocking dearth of “trustworthy financial information” in November 2022.
Ray enthusiastically announced, “We are pleased to be in a position to propose a Chapter 11 plan that contemplates the return of 100% of bankruptcy claim amounts plus interest for non-governmental creditors.”
Bankman-Fried, the founder of FTX, bore the brunt of his financial misadventures, facing seven accounts of criminal charges, including the high-profile embezzlement of billions from FTX customers. Serving as an effective deterrent for financial nugatory, he was meted out a stiff sentence of 25 years behind bars.
Presently, FTT, having corrected to $2.050 following its recent peak, prepares for a potential breakout after a consolidation phase between the $1.17 and $1.48 levels. Its foremost hurdle lies at $2.169; breaching this resistance could trigger the momentum needed to reach $2.55, a milestone not seen since January.
However, if the currency recoils, FTT enthusiasts would do well to keep an eye on the $1.95 and $1.765 floors, crucial benchmarks aimed at preserving the hard-fought 18% gain in the past month.
