The native cryptocurrency of the bankrupt crypto exchange FTX has seen bullish action amid looming bankruptcy distributions.
FTX Token (FTT) surged by more than 70% to multimonth highs on Sept. 29, briefly touching $2.70 for the first time since March 2024, according to CoinGecko data.
FTT 30-day price chart. Source. CoinGecko
FTT, which traded at around $1.4 over the past month, posted a sharp spike of more than 70% in daily returns on Sept. 29. It subsequently tumbled in price, trading at roughly $2.10 at the time of writing on Sept. 30, up approximately 30% over the past 24 hours, according to data from CoinGecko.
FTT’s rally followed rumors of bankruptcy distributions
FTT’s rally came amid social media rumors alleging that the FTX bankruptcy estate would start distributing reimbursement funds to creditors and customers on Sept. 30.
However, according to the official Chapter 11 filing, the bankruptcy plan has yet to be approved. A court hearing to approve the plan is scheduled for Oct. 7.
Source: FTX creditor activist Sunil Kavuri
If the plan is approved, the FTX trustee will start paying distributions to creditors under $50,000 by the end of 2024. On the other hand, creditors with larger claims may not receive distributions until the first or second quarter of 2025.
FTT plummeted 80% when FTX collapsed in 2022
Like many centralized cryptocurrency exchanges, FTX launched its FTT token shortly after debuting the platform in 2019.
FTT offered multiple benefits, including trading fee discounts for users based on the amount of FTT they held. The token could also be used as collateral for futures positions on the exchange.
Related: FTX creditors only getting ‘10-25% of their crypto back’ — Creditor
The FTX Token reached an all-time high of nearly $80 in September 2021 but steadily declined to around $25 before FTX’s implosion in November 2022.
Following the collapse of FTX, the FTT plummeted from $25 to below $2, where it has mostly traded since.
FTT all-time price chart. Source: CoinGecko
The massive sell-off of FTT in 2022 was contributed to by major crypto exchange Binance dumping its entire holdings for “post-exit risk management” purposes, as communicated by former Binance CEO Changpeng Zhao at the time.
According to data from the blockchain explorer Etherscan, there are around 30,600 FTX Token holders at the time of writing on Sept. 30. FTT has a market cap of around $330 million.
In July 2024, the FTX repayment plan reportedly recommended removing FTT claims from the bankruptcy proceedings due to “recognition of the equity-like characteristics of FTT.”
Magazine: CZ walks free, Caroline Ellison receives prison sentence, and more: Hodler’s Digest, Sept. 22 – 28