Due to the news of the impending implementation of a repayment plan by customers and creditors, the price of the FTX token (FTT) has soared.
As FTX Trading Ltd and its related debtors begin to implement the Chapter 11 reorganization plan confirmed by the U.S. Bankruptcy Court on October 1, 2023, FTT is on the rise.
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FTX Reimbursement Plan Timeline and Key Requirements
FTX has revealed that the preparatory work for the reimbursement process is now in the final stages. The process is planned to start from January 2025.
As reported in the company's recent update, the dedicated distribution agents will be finalized by early December to facilitate global payments to eligible creditors and customers.
Customers must register their accounts, verify their identity, and complete tax forms on the FTX customer portal for these agents.
According to FTX, customers who meet the above criteria before the record date will be eligible. It is expected that the first allocation will take effect in January.
In most cases, the initial distribution is expected to be made to all owners of claims allowed in the plan within sixty days of the plan's effective date.
Challenges and Ongoing Litigation
However, the FTX bankruptcy estate has not yet escaped legal difficulties. Creditors have attacked the creditor repayment plan. These key creditors argue that the expenses determined based on the asset values at the time of the 2022 bankruptcy filing are unfair.
For example, at the time of this report, the trading price of Bitcoin (BTC) was around $16,000. Since then, its price and value have risen significantly.
Moreover, the FTX estate has initiated multiple lawsuits to reclaim assets held at other cryptocurrency exchanges and companies.
In October, FTX sued Kucoin, seeking to recover $50 million allegedly locked on its platform since the exchange's collapse.
In November, Crypto.com and Binance were respectively accused of fraudulent transfers of $11 million and $1.8 billion.
FTX has also filed legal action against SkyBridge Capital and Anthony Scaramucci to recover $100 million in sponsorship and investment funds.
Recent Rulings and Impact of Asset Recovery
FTX co-founder Gary Wang was sentenced this month for his role in an $8 billion fraud scheme that led to the exchange's collapse.
His cooperation is reported to have helped creditors recover billions of dollars. Wang was ordered to surrender $11 billion.
All senior executives involved in FTX's activities have been held accountable, including former CEO Sam Bankman-Fried.
However, the FTX restructuring team has been able to recover billions of dollars in other assets. The recovered assets will be shared according to the reorganization plan.
This has boosted market sentiment, as evidenced by the rise in the value of the FTT token.
FTT Token Price Rebound and Market Sentiment
The FTX token (FTT) experienced a significant decline after the exchange's collapse, but has seen a 42% surge in the past day.
This price increase reflects investors' growing optimism about FTX's ability to effectively execute its reimbursement plan and continue to recover assets through ongoing litigation.
Technical analysis shows that the 50-day moving average has moved above the 200-day moving average, indicating a "golden cross", which is a bullish crossover.
This pattern suggests that if the FTT price successfully breaks through the $3 resistance level, it could approach a bullish breakout. However, the Relative Strength Index (RSI) is at 70.87, indicating that the bull market may be weakening.
During the bull market, FTT's market capitalization and 24-hour trading volume have surged 20% and 267% to $854.33M and $211.17M, respectively.
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