FTT is pumping again, and FTX creditors can actually make a profit?
If the reorganization plan is approved by the bankruptcy court, 98% of FTX creditors will receive approximately 118% of their allowed claim amounts within 60 days after the plan becomes effective.Author: Luccy, BlockBeats
On May 8, FTX and its affiliated debtors submitted a reorganization plan and disclosure statement to the U.S. Bankruptcy Court in Delaware, which is expected to concentrate the distribution of nearly all of FTX's assets at the time of its bankruptcy in November 2022 to global customers and other creditors.
After experiencing the dark times following the FTX collapse, "full compensation" may be the most desired term for creditors. As a result, the FTX platform token FTT saw a surge, rising above $2.1, with a 24-hour increase of 19.16%.
FTX Restarts, Creditors Will Get Back 118% After 60 Days
When FTX declared bankruptcy, creditors faced a long bankruptcy process in court, with no guarantee of how much of their claims would be compensated.
Since FTX filed for Chapter 11 bankruptcy in the Delaware District Court on November 11, 2022, calculating the exact timing and value of debt transactions has been very complex. Industry traders told Fortune magazine that some debt transactions occurred on online platforms, while others were conducted privately, with buyers not needing to submit transfer applications immediately, leading to delays, and some debt transactions were reported simply as their own claims.
Most creditors hope to recover at least some funds, so in the absence of certainty about how transactions will cover funding gaps, some creditors may sell their claims at a low price, while the buyers' losses depend on how much debt the bankruptcy administrator can recover.
Related Reading: Gambling on FTX Bankruptcy Claims, He Made $25 Million
As of March 28, there have been 49 transactions on the major online trading platform Claims Market, exchanging claims worth over $439 million. Meanwhile, according to court records as of March 20, hedge funds have purchased heavily discounted claims worth over $2.3 billion.
FTX expects the total value of assets collected, converted to cash, and available for distribution to be between $14.5 billion and $16.3 billion. This amount includes assets controlled by Chapter 11 debtors as well as assets controlled by FTX Digital Markets, Ltd. (Bahamas), joint official liquidators, the Bahamas Securities Commission, and FTX Australia joint official liquidators.
In other words, if the reorganization plan is approved by the bankruptcy court, 98% of FTX creditors will receive about 118% of their allowed claim amounts within 60 days after the plan takes effect. The remaining creditors will receive all claims, "plus billions of dollars in time value compensation for investments."
Bitcoin and SOL Are the Saviors
FTX's "rebirth" can largely be attributed to the surge in Bitcoin and SOL.
According to data submitted in the FTX case report, FTX's estate includes approximately 59 million SOL and 21,482 Bitcoins. Since the company filed for bankruptcy, these tokens have risen approximately 1,000% and 343%, respectively. FTX plans to sell 41 million SOL to institutional investors at a price 68% lower than the current market price, which is approximately $6 billion at the time of this publication.
Did Bitcoin Haters Anticipate the "Bitcoin Bull Market"?
In SBF's view, Bitcoin has no future as a payment network, criticizing it for inefficiency and high environmental costs. He once said, "The Bitcoin network is neither a payment network nor a scalable network." Perhaps it is well-known that SBF hates Bitcoin; Ark Invest CEO Cathie Wood has stated on her social media that "SBF dislikes Bitcoin because it is transparent and decentralized, which SBF cannot control."
Since SBF was imprisoned, the crypto winter has lasted nearly a year. However, with the anticipation of Bitcoin halving and ETFs, speculative sentiment has gradually increased. On January 11, Bitcoin ETFs were successfully approved, marking a new chapter for the crypto industry, with significant funds entering the Bitcoin ecosystem through ETFs. Beyond the meme frenzy, Bitcoin has seen a resurgence from inscriptions to runes, and then to a flourishing L2, truly a "Bitcoin bull market."
Even though SBF hates Bitcoin, he does not deny its material value and still trades Bitcoin for profit from an investor's perspective. According to data submitted in the FTX case report, when FTX announced bankruptcy, it still held tens of thousands of Bitcoins. Bitcoin has gradually reached historical highs amid the enthusiasm of this bull market, and although it has seen multiple pullbacks, most researchers remain confident about its future.
While SBF may not witness this historic moment in prison, it is undeniable that it is the Bitcoin he once criticized that has injected funds back into the crypto world.
Investors Choosing SOL
During the time Bitcoin has been leading the charge, SOL is also an important asset not to be overlooked, and the relationship between FTX and Solana is a well-known story in the crypto circle.
Solana was never a team born with a silver spoon; after the fundraising for validator nodes ended in 2019, Anatoly and Raj insisted on focusing on launching the mainnet, which caught SBF's attention. At that time, SBF was looking for collaborative public chains, and among many well-known public chains, Solana may not have stood out, but one thing made SBF decide to invest deeply in Solana.
After SBF learned about Solana from Anatoly and Raj, he immediately instructed engineers to send a large number of spam transactions to Solana to test the performance of the Solana public chain. Solana withstood this challenge, and that day SBF decided to invest in Solana. A few days later, the design of Serum, a decentralized order book matching engine incubated by FTX, was born.
Related Reading: The Rise and Fall of Solana: Many Coincidences and a Few Certainties
It can be said that the mutual choice between FTX and Solana created each other, and SBF is naturally a loyal investor in SOL. SBF believes that Solana could become the next Bitcoin, and its market capitalization could surpass Ethereum; few blockchains can compare with Solana. "Solana is one of the few public blockchains with a truly reasonable roadmap, capable of scaling millions of transactions per second, with each transaction costing just a few cents, which is the scalability advantage users need."
After FTX declared bankruptcy, the Solana public chain was also severely impacted and fell into difficulties, with SOL prices plummeting. However, Solana still attracted countless users to invest with its high performance and low gas fees, especially after last year's meme craze, with SOL prices breaking into three digits and repeatedly reaching historical highs.
Since SBF's detention last summer, he has remained "fond" of Solana even in prison, with rumors circulating that he "recommended investing in SOL to prison guards." Although SOL has experienced pullbacks during several market corrections, it has maintained a price in the three-digit range, generating substantial profits for FTX.
Now, all seven charges against SBF have been established, and he has been sentenced to 25 years in prison by a Manhattan court in the U.S., along with a staggering $11 billion fine. The chapter led by this legendary figure, FTX, has come to an end. The restructured FTX may open a new chapter after fully compensating creditors, but whether the reorganization proposal can be approved remains uncertain amid recent tightening regulations.
