FTT Surges 70% on Rumors That Bankrupt FTX Will Begin Distributing Funds to Creditors

FTX’s native cryptocurrency, FTT, saw a dramatic price increase, surging by over 70% to hit $2.70, its highest level since March 2024.

FTX's native cryptocurrency, FTT, experienced a surprising rally on Monday, with its price surging by over 70% to reach $2.70, marking its highest level since March 2024.

The rally comes amid rumors on social media that FTX, which filed for bankruptcy last year, will begin distributing funds to creditors and customers.

According to data from CoinGecko, FTT had been trading around $1.40 for most of the past month before the spike. However, it later dropped to about $2.10, still up by around 30% in the last 24 hours.

The sudden bullish action in FTT follows rumors that the FTX bankruptcy estate will begin reimbursements on September 30.

However, official court filings from the Chapter 11 proceedings show that the bankruptcy plan has not yet been approved, with a court hearing set for October 7. If approved, then distributions to creditors with claims under $50,000 could begin by the end of 2024, while larger claims may not be settled until 2025.

FTT's rise comes after a steep fall following FTX's collapse in November 2022. At its peak in 2021, FTT reached nearly $80, but after FTX's implosion, the token dropped below $2 and has traded at that level since. The crash was accelerated when Binance, a major FTT holder, sold its entire position in FTX for risk management purposes.

As of September 30, there are around 30,600 FTT holders, with the token’s market cap sitting at roughly $330 million. Notably, FTT was excluded from FTX's repayment plan in July 2024 due to its “equity-like characteristics,” further complicating its future amid the bankruptcy proceedings.

In another development, the restructuring administrator of FTX has revealed that over 94% of its Dotcom clients have voted in favor of the company's reorganization plan.

Kroll Restructuring Administration, which was tasked with managing the voting process, reported on Monday that nearly all creditor classes chose to “accept” the plan, with two classes presumed to approve despite not returning ballots.

Specifically, 94.48% of creditors in the “dotcom customer entitlement claims” category — representing claims worth about $6.83 billion — voted to approve the plan.

In the “U.S. customer entitlement claims” class, nearly 89.1% of creditors, representing $60.99 million in claims, also supported the reorganization.

Furthermore, 95.88% of creditors in the “dotcom convenience claims” class, representing $223.59 million, voted in favor.

The reorganization plan is set to return at least 118% of the claim value to 98% of creditors, based on the value of relevant cryptocurrencies at the time of the claims' evaluation. The confirmation hearing for the plan is scheduled for October 7.

When voting concluded in August, FTX's restructuring team reported overwhelming support from creditors, with more than two-thirds of solicited claims participating in the process.

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