FTX’s $16 billion compensation is imminent, is the second half of the bull market about to begin?

1. Foreword

FTX, the fastest-growing CEX unicorn in the history of cryptography, with a daily peak trading volume exceeding US$6.6 billion and a total token market value of US$26 billion, collapsed, accelerating the last bull market. It is over, and as FTX begins to compensate investors, the "ammunition arsenal" for the second half of the bull market is about to begin.

According to an official email, FTX liquidator PwC issued an update on the liquidation process, in which clients of FTX or FTX International have the right to bring claims in the Bahamas proceedings or the US proceedings. At this stage, if the bankruptcy protection plan is approved, customers can expect to receive between 119 and 143 cents per dollar in claims.

For clients who have submitted a Proof of Debt claim in The Bahamas proceedings, FTX will send a letter in the future to confirm whether the client wishes to continue to have the claim managed, processed, adjudicated and resolved in The Bahamas. Customers who have not yet submitted a proof of debt claim in the Bahamas process may do so by the deadline, currently expected to be mid-August 2024.

Public information shows that FTX plans to distribute more than $16 billion to its creditors. The key dates are as follows:

1. August 16: FTX customer voting deadline;

2. October 7: Judge Dorsey on Planning approval decisions are made.

After court approval, FTX will repay creditors within two months. The specific implementation period is from the fourth quarter of 2024 to the first quarter of 2025. The repayment event, together with interest rate cuts, the US election and other factors, will bring more to the encryption market at the end of the year. favorable factors. Given that the majority of FTX customers are cryptocurrency enthusiasts, a massive $16 billion will enter the cryptocurrency market and act as a catalyst for price increases.

2. The key time points for compensation are as follows, investors can keep paying attention

PS: There are some uncontrollable factors in the compensation process, such as creditors’ doubts about the compensation plan. The main point of dispute is legal currency compensation or token compensation.

1. Email sending deadline: July 10 (passed)

The last date for debtors to send voting packages and related documents to creditors to ensure that all relevant parties receive the necessary information within the specified time so that they can Vote or raise objections to the plan;

2. Rule 3018 motion filing deadline: July 16

If a creditor requests temporary permission or changes to its voting rights, a motion must be submitted before this date. Resolve disputes before the official vote to ensure the vote is fair and accurate.

3. Deadline for submission of supplementary plan documents: August 9th

4. Deadline for submission of confirmed objections: August 16th

5. Deadline for voting: August 16th at 4:00 pm (EST) )

All votes must be correctly executed, completed and delivered by this date;

6. Voting report deadline: 7 days before the confirmation hearing

7. Deadline for responding to confirmation objections: before the confirmation hearing 7 days

8. Proposed date for the hearing to confirm the plan: October 7, 10:00 a.m. (Eastern Time) [tentative]

The date for the court to consider confirming the hearing of the reorganization plan;

3. As above The article mentioned that because some creditors are dissatisfied with the compensation plan, the buying power of US$16 billion is still uncertain

The lawyer responsible for supervising the FTX bankruptcy case recently submitted a reorganization plan that will pay almost all customers in full. compensation and an additional 18% interest. If a majority of creditors and a bankruptcy judge agree to the plan, compensation would be paid out within two months. But creditors still expressed dissatisfaction and concerns about the following aspects:

Creditors are dissatisfied with the restructuring plan

Some creditors are dissatisfied with the restructuring plan because they cannot get their original cryptocurrencies back from the exchange. Instead, they will be compensated in U.S. dollars based on the value of the cryptocurrencies they held when FTX filed for bankruptcy in November 2022. Many believe this caused them to miss out on a profit opportunity, as cryptocurrency prices have since risen.

Creditors accuse FTX of selling assets at low prices

Creditors also accuse FTX of selling some of its assets at low prices before bankruptcy, such as the crypto derivatives platform LedgerX and a large number of SOL tokens. They believe the transactions harmed creditors and have called for an investigation into those involved.

Creditors question FTX 2.0 plans

Some creditors believe that FTX could have gained hundreds of millions of dollars in additional value had it decided to restart its trading platform. However, FTX said they had explored the possibility of a relaunch but were unable to find any buyers willing to invest.

Creditors Concerned About Unpursued Claims

Creditors are also concerned that FTX may not be pursuing all claims that are due, such as the one against Binance. FTX stated that they are still investigating and filing lawsuits, but have not made a final decision on matters related to Binance.

Reorganization plan faces opposition

In addition to the above issues, some creditors also raised objections to certain provisions of the reorganization plan, such as the distribution method and governance structure. They argued the plan was too favorable to FTX's management team and lacked oversight of creditors.

IV. Summary

It has been two years since the FTX thunderstorm. Although investors will receive compensation of nearly 1.18 times the nominal value, they have also paid a huge cost of time and energy. Creditors must also be aware of this while asserting their rights. Since most assets have been liquidated, FTX's only U-based assets have lost the potential to achieve high returns in the bull market.

Back to this article, if the existing compensation plan is followed, nearly US$16 billion will be injected into the crypto market at the beginning of the fourth quarter, which will inevitably increase market liquidity and enhance investor confidence.

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