TL;DR
- FTX announced plans for a full refund to its users during a court hearing. However, it will not restart its operations.
- FTT, its native token, plummeted by 15% after the non-reactivation of the platform was confirmed.
- The trading volume of FTT increased by 560%, reaching $101 million in the last few hours.
In a recent development in the industry, the cryptocurrency exchange FTX, which is currently bankrupt, announced its plans to fully refund its users. This announcement was made during a court hearing, where the company expressed its intention to fulfill its financial obligations to the affected customers.
Simultaneously with this statement, FTX confirmed the decision not to restart its platform. According to Reuters reports, the reason behind this determination lies in the lack of interested buyers to acquire the platform. The legal situation of the exchange is quite complex, and its founder, Sam Bankman-Fried, faced charges and was found guilty last year of misappropriating customers’ funds before the platform’s collapse in late 2022.
Ambiguous Reactions to FTX’s Announcements. Its Token, FTT, Plummets
FTX’s announcement had an immediate impact on the market, evidenced by the 15% plunge in the value of its native token, FTT, after the news. This fall can be interpreted as a clear negative response from investors to the announcement that the platform will not resume its operations, despite stating that it will fulfill its financial commitments. It is also noteworthy that the trading volume surged, increasing by 560% in the last few hours, approaching $101 million.
FTX’s track record includes a tumultuous 2023, marked by its collapse and the subsequent bankruptcy process. During this period, the company filed for Chapter 11 bankruptcy and faced numerous customer lawsuits, exceeding 36,000, totaling $16 billion in claims.
The legal situation of Sam Bankman-Fried, as a central figure in this episode, is another crucial element for the exchange. His guilty verdict for misappropriation of funds before the platform’s collapse highlights the legal challenges that the crypto industry faces in terms of regulation and financial responsibility.
FTX faces a crucial moment in its trajectory, with the promise to refund its users but with no prospects of restarting its operations. Over time, we will see if the exchange effectively manages to settle its debts with creditors. Although it seems that the announcement of the cessation of operations marks the endpoint in its history.
