FTX Token Rockets 70% in One Day

The native cryptocurrency of the bankrupt FTX exchange, FTX Token (FTT), has experienced a surge in value amid speculation about upcoming bankruptcy distributions.

On September 29, FTT spiked by more than 70%, reaching multimonth highs and briefly touching $2.70 for the first time since March 2024, according to CoinGecko data.

Previously trading around $1.40 over the past month, FTT saw a sharp 70% increase in daily returns on September 29.

However, it quickly retraced, trading at approximately $2.10 as of September 30, still marking a 30% gain over the past 24 hours, according to CoinGecko.

This rally followed social media rumors suggesting that the FTX bankruptcy estate would begin distributing reimbursement funds to creditors and customers on September 30.

However, the official Chapter 11 filing indicates that the bankruptcy plan is yet to be approved, with a court hearing scheduled for October 7.

If the plan is approved, the FTX trustee is expected to begin making distributions to creditors with claims under $50,000 by the end of 2024, while those with larger claims may not see payments until the first or second quarter of 2025.

FTX, like many centralized cryptocurrency exchanges, launched its FTT token soon after its platform debut in 2019.

FTT provided various perks, such as trading fee discounts for users based on the amount of FTT they held, and it could also be used as collateral for futures positions on the exchange.

At its peak in September 2021, FTT reached an all-time high near $80, but its value dropped to around $25 before the collapse of FTX in November 2022.

Following FTX’s downfall, FTT plummeted from $25 to below $2, where it has remained for the most part.

The massive FTT sell-off in 2022 was partly driven by Binance, which liquidated its entire FTT holdings for “post-exit risk management” reasons, as stated by former Binance CEO Changpeng Zhao.

According to Etherscan, as of September 30, there are approximately 30,600 FTT holders, with the token's market cap sitting around $330 million.

In July 2024, FTX’s repayment plan reportedly recommended excluding FTT claims from the bankruptcy proceedings due to its "equity-like characteristics."

Sources:

https://cointelegraph.com/news/ftx-token-ftt-spike-bankruptcy-distribution

https://www.coingecko.com/en/coins/ftx-token

https://x.com/Crypto_Ed_NL/status/1840649174049566978

https://etherscan.io/token/0x50d1c9771902476076ecfc8b2a83ad6b9355a4c9

https://www.pymnts.com/cryptocurrency/2023/ftx-bankruptcy-plans-do-not-include-ftt-token-holders/