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Cryptocurrency News Articles
Rumors of FTX Distributing Reimbursement Funds to Creditors and Customers by September 30th Debunked
Oct 01, 2024 at 12:00 am
Rumors have been swirling on social media suggesting that FTX's bankrupt crypto exchange would begin distributing reimbursement funds to creditors
Bankrupt crypto exchange FTX will begin distributing reimbursement funds to creditors and customers by the 30th of September, according to rumors circulating on social media.
However, these claims are false, as no court has yet approved the reimbursement plan.
Initially, in May, FTX had stated its intention to fully repay creditors, with some expected to receive more than 100% of their claims. However, on the 28th of September, FTX creditor Sunil Kavuri revealed that updated bankruptcy documents now indicate creditors may only recover between 10–25% of their cryptocurrency holdings.
This rumor gained traction online, as noted by X (formerly Twitter) user Crypto Rover, who highlighted the following:
However, the latest Chapter 11 filing states that the next court hearing to confirm FTX’s restructuring plan will be held on the 7th of October, with Judge John T. Dorsey from the United States Bankruptcy Court for the District of Delaware presiding.
If the plan is approved, claimants with claims below $50,000 could potentially start receiving payments by the end of 2024. Nevertheless, those with larger claims may face longer waiting periods, with distributions expected to be delayed until the first or second quarter of 2025.
Commenting on the matter, Sunil, an FTX Creditor Champion, took to X and noted the following:
Adding to the discussion, another X user commented, “No they won’t.”
Under the current distribution plan, creditors will be reimbursed based on the value of Bitcoin [BTC] at the time the legal petition was filed. At that time, the value was approximately $16,000 per BTC.
As a result, creditors and former customers would only receive around a quarter of their original holdings, as noted by Sunil Kavuri. However, some market analysts believe this payout could have a bullish effect on the cryptocurrency market.
In his research report, Markus Thielen, founder of 10x Research, suggested that the reimbursement could lead to a $5 billion to $8 billion capital inflow, potentially increasing demand and prices.
A crypto trader and investor, Sheriff, shared a similar thought, stating, “More inflow.”
On the other hand, FTX Token [FTT] experienced a significant surge, rising by 113% during an intraday high on the 29th of September. Despite a correction later in the day, FTT still closed 57% higher than its opening value. This sparked speculation among investors about its future trajectory.
According to the latest data from CoinMarketCap, FTT remained up by 31.53%, trading at $2.14, leaving market participants curious about the token’s potential in the coming weeks.
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