Reading Time: 2 minutesFTX has decided to fully repay crypto holders and abandon plans for a restart, marking the end of the exchange for good
The decision follows months of negotiations with potential bidders and investors
While crypto holders will receive 100% payouts, valuations will be based on November 2022 levels, the bear market’s absolute bottom.

FTX will repay its crypto holders in full and has abandoned plans to restart its operations, signaling the death of the headline-grabbing operation once and for all. The decision was announced during a bankruptcy court hearing in Delaware following negotiations with potential bidders and investors for several months. While crypto holders will be pleased with getting 100% payouts, the valuations will be pegged to November 2022 levels, which represented the absolute bottom of the bear market.

Cost and Risks of a New FTX Too High

CEO Jon Ray III revealed this time last year that FTX was open to the possibility of relaunching under new ownership, with various investors dipping their toes in and testing the water. However, none were willing to invest enough money to rebuild the exchange, with FTX attorney Andy Dietderich revealing in court why no bidders had opted to take up the challenge:

FTX was an irresponsible sham created by a convicted felon. The costs and risks of creating a viable exchange from what Mr. Bankman-Fried left in a dumpster were simply too high.

As late as October there were reportedly three bidders vying to re-open FTX, but all have since dropped out, leaving operators with little choice but to liquidate.

Customers Unhappy at Crypto Valuations

FTX will now focus on liquidating its assets to repay customers whose cryptocurrency deposits were locked when the company filed for bankruptcy in November 2022. The exchange has recovered over $7 billion in assets for customer repayment, while FTX has also reached agreements with government regulators, who have agreed to wait until customers are fully repaid before attempting to collect on approximately $9 billion in claims.

FTX anticipates paying all customers in full, but the repayment calculations will be based on cryptocurrency prices from November 2022, when the market was in the throes of the bear market.

This has led to complaints from some customers who argue that they are being shortchanged, considering the significant rise in cryptocurrency prices since then, a rally that has seen Bitcoin jump from $16,870 in November 2022 to $42,000 today.

 

The post FTX Will Distribute 100% of Crypto Holdings and Will Not Relaunch appeared first on FullyCrypto.

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Filed under: Bitcoin - @ February 1, 2024 8:23 am