The FTX Bankruptcy Committee is approaching the final stage of issuing refunds to affected customers. In this article, we will discuss the conclusion of the process and potential market impacts.
FTX Creditors Announcement
FTX's Customer Claims Portal has been open for a long time, providing guidance for victims regarding the refund process, which involves eight stages. Recently, the FTX Bankruptcy Committee announced the activation of a screen for 'defining tax requirements before refunds' on the portal. Creditors can log in to the system and complete the final step before refunds with the help of provided instructions. Investors who completed their KYC information and verified their account balances had to provide proof of claims. Recently, they were asked to vote on the bankruptcy plan, which has also been completed. Now, the seventh step involves defining tax requirements, and refunds are likely to start within 40 days.
What Will Happen to FTT Coin?
Nothing will happen. The Bankruptcy Committee had negotiated with at least three potential buyers for the sale of the FTX exchange up until the final stages. However, due to legal obstacles, these negotiations have fallen through. Speculators began generating interest in FTT Coin, claiming that the exchange could be sold and that negotiations had gone well. Yet, it has been stated that FTT Coin would become worthless regardless of the exchange’s sale. The supply of FTT Coin is largely held by investors, and creating a new token instead of FTT Coin would take mere seconds for new buyers. As illustrated in the graph, altcoins targeting below one dollar are likely to become history following the FTX refunds. Alternatively, like LUNC, they may survive as meme coins generating a limited amount of trading volume.
FTX Refunds and Crypto Bull Market
FTX faced challenges even after its bankruptcy, affecting the cryptocurrency market. Why? The Bankruptcy Committee rapidly converted existing cryptocurrencies into cash. These sales during an already declining market led to even deeper lows. Now, recall the stress of those days and envision the opposite scenario occurring in the next three months. Investors are receiving refunds for altcoins sold at low prices. A significant portion of the refunds will flow to investors interested in altcoins, particularly Sam Coins (e.g., SOL, NEAR), amounting to billions of dollars. What can be expected as a result? Investors are likely to begin exchanging billions of dollars in cash refunds for altcoins through cryptocurrency exchanges in the last quarter. This scenario is the complete opposite of the impact from the Mt. Gox sales. Unlike previous cases where billions of dollars were withdrawn from markets, this time, billions will be pumped into the markets.
The FTX Bankruptcy Committee is completing the necessary steps for issuing refunds to the affected customers. This event is expected to significantly impact the cryptocurrency market in the coming months.
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