FTX Customers Will Start to Receive More Than $12B in Payouts
- DDDOriginal
- 2024-10-09 22:28:14997browse
In a payout plan approved in court, the exchange must credit its former customers in the coming months.
FTX customers will start to receive more than $12 billion in payouts as part of a court-approved plan that will see the bankrupt exchange credit its former customers in the coming months.
The payouts are a welcome development for customers whose digital assets have been locked in the exchange since its collapse. According to a note from Alex Thorn, Head of Research at Galaxy Digital Holdings, an initial disbursement of $1.1 billion, while small, will still be supportive of Bitcoin.
The company’s assets have not been fully recovered. However, the initial $12.6 billion promised to customers back in June could increase to $16.5 billion once the recovery process is completed.
According to market players like Benjamin Celermajer, the co-chief investment officer at Magnet Capital, the payouts could boost liquidity for major crypto traders. Celermajer believes the money might flow back into the cryptocurrency market. If that happens, it could boost prices in low-liquidity markets, he added.
Did FTX Collapse Help the Crypto Market?
Despite the crypto market losing a substantial amount of funds following FTX’s collapse, the market has grown to $300 billion this year. According to reports, the bullish development is attributed to FTX’s collapse. Reports also add that the market began to rally after a US Judge ordered FTX to pay its customers.
On Nov. 11 2022, FTX, which was then a leading crypto exchange, filed for bankruptcy protection in the United States. The company’s CEO, Sam Bankman-Fried, recorded a drop in his net worth, which went from $26.5 billion to $16 billion, and finally to zero within a week.
The crash predictably impacted the broader cryptocurrency market. The FTT token, which is affiliated with FTX, plummeted, and as a result, leading assets Bitcoin and Ethereum followed suit, dropping to a two-year low on Nov. 9 2022. At press time, FTT trades at $2.26.
Sam Bankman-Fried was arrested on Dec 12 2022, and later sentenced to 25 years in prison for tax fraud in March.
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