In a shocking turn of events, the now-defunct cryptocurrency exchange FTX has revealed a plan to reorganize that will pay back almost all of its clients.
The news caused an enormous spike in the exchange’s own token, FTT. It has gone up by 52% in the last week and reached a high point of $2.29 early Wednesday morning.
According to the reorganization plan that was made public late Tuesday, FTX owes about $11.2 billion to its bondholders. But the company has said that it has assets worth between $14.5 billion and $16.3 billion that will be shared among its creditors.
The suggested plan says that clients whose claims are worth less than $50,000 should get about 118% of their claim amount. The funds will be given to about 98% of the creditors, which will be good news for FTX users whose funds they had not been able to get since the exchange filed for bankruptcy in November 2022.
In a news release on Wednesday, FTX made it clear that it couldn’t use the value of the missing tokens during the Chapter 11 proceedings. Instead, the company had to find other means of recoverable value in order to pay off its debts.
FTX Leadership And Market
FTX named John Ray III as CEO after founder Sam Bankman-Fried left the company. It was shocking to Ray that “complete failure of corporate controls and such a complete absence of trustworthy financial information” were seen at FTX in November 2022. Bankman-Fried was found guilty on seven criminal charges, including stealing billions of dollars from FTX’s clients. He was sentenced to prison time. After that, he was given a 25-year prison term.
As of the most recent update, FTT’s price has gone down to $2.250 after hitting its monthly high point. After staying in a range between $1.17 and $1.48 for a while, this breakout happened.
At its current price, FTT faces strong opposition at $2.169, which is why the decline is still going on. If FTT keeps going up, the next level of resistance to watch is $2.55 on the daily chart of the coin.
If this level is broken, it could lead to a new test of the $3 mark, which has not been hit since January.
On the other hand, if prices decline even more, supporters of the FTT should keep a close eye on support levels at $1.95 and $1.765. This is important to protect gains made in the last month, which add up to an 18% rise.
