FTT Token Rises Amid FTX Refund Value Complaints

Written by

Cryptocurrency Writer

Published Jan 12, 2024 at 3:57 PM
Last updated Jan 16, 2024 at 10:28 AM

The price of FTX Token (FTT) has jumped by more than 13% in the past 24 hours to become the top-performing coin of the day so far. The rise follows news of a recent filing by FTX customers who are objecting to the bankruptcy plan that will see the refunds set at a fixed value, as opposed to what their assets would be worth now. 

Refund objections

One of the most contentious parts of the payback scheme set forth by the FTX bankruptcy team was their roadmap for returning customer funds. Users would not be getting their assets back or their equivalent current value refunded. Instead, their value would be pegged to the date that FTX filed for bankruptcy, 11 November 2023.

The objection writes: “The Objectors are all customers who deposited assets on the FTX.com platform, and are entitled to the return of their property. The Terms of Service expressly state that all Digital Assets are held in a customer’s Account belong to the customer.”

Here, the filing argues that the FTX terms of service “unambiguously” certified that the customer’s assets could not be leveraged by FTX as they were never the property of FTX to begin with. It asserts that the motion to make cash refunds based up a historical value is “premature and should be denied” until “the property rights of the customers are determined.”

As per the FTX Chapter 11 filing, 11 January 2024 was the final date for objection filings, with a hearing date set just for a week or so on 25 January.

Creditors may feel particularly annoyed following the growth of Bitcoin (BTC) and other cryptocurrencies throughout the later months of 2023, especially when spot Bitcoin exchange-traded fund (ETF) approval anticipation was peaking throughout December 2023.

Trading an old exchange

After briefly falling below $1billion in market capitalization after a steep decline in November 2023, the native token of the embattled FTX exchange has found itself on oddly favorable footing. 

Considering that the token is declared to have zero functionality and therefore zero value, it remains purchasable and tradable across many major centralized and decentralized exchanges (DEXs). But why is it rising?

It can be argued that the overall bullish sentiment is pushing prices upward as a result of the United States Securities and Exchange Commission (SEC) approving the nation’s first spot Bitcoin ETFs. 

Furthermore, some speculative traders may be using their newly found gains to gamble on the outcome of the recent objection filings from FTX creditors, as well as the pending FTX bankruptcy hearing date on 25 January. 

All eyes are on the FTX legal proceedings as the results of these legal battles will likely set a precedent for the digital asset sector going forward. In terms of accountability and consumer protections, the FTXand Sam-Bankman Fried (SBF) drama is a turning point for the entire industry.

Written by

Eddie is a seasoned crypto writer and Bitcoin maximalist.