FTX To Eliminate FTT Token, Suggests Creditors Be Paid In Cash

In a recent development, the bankrupt FTX crypto exchange has announced a draft creditor-repayment plan as part of its ongoing bankruptcy restructuring procedure. The freshly revamped exchange intends on clearing out its digital token FTT while settling customer claims in cash.  

A Look At The Plan

The draft creditor-repayment plan is a product of feedback from the platform’s stakeholders. According to the plan, FTX intends to value every customer claim in USD as of the date of bankruptcy. 

Court documents show that the restructuring plan will see FTX repaying creditors by selling off assets tied to different silos of the business. Additionally, the platform has not completely dismissed the option of rebooting its offshore exchanges. 

The creditor repayment process will be guided by three recovery pools. These pools include assets drawn from FTX US customers, assets from customers, and assets not directly linked to the exchanges. 

The company regards most of its creditor classes as impaired, which indicates that the company does not intend to compensate them fully. However, the company has pointed out that the proposed plan is still subject to change. To ensure transparency of the process, the draft plan provides for seven creditor classes to vote on the plan, including NFT holders, FTX US customers, and customers. 

FTX FTT Token price chart from

FTT Token at $1.44 | Source: FTTUSDT on

According to John R. Ray III, FTX’s CEO and Chief Restructuring Officer, the firm intends to partner with customers in the coming months and also file an amended plan within the fourth quarter of the year as the plan remains in its infancy state. Nevertheless, it offers an opportunity for good-faith compromise of a remarkably large and complex collection of claims. 

It remains to be seen how the process will pan out, especially with respect to the manner in which the exchange will be reorganized or sold, the order of priority of assignment for exchange shortfall claims, and general estimates of creditor recoveries. 

The draft creditor repayment plan does not include any recovery plan for FTT tokens. The plan cited their “equity-like characteristics” and the US bankruptcy restructuring plan usually wipes out the equity component. 

The Remarkable Collapse Of An Exchange Giant

FTX was once a large cryptocurrency exchange platform of equal standing with peers like Coinbase and Binance. The firm enjoyed massive support and held enormous promise. At its all-time high, the platform’s native token FTT, was worth over $80, with over 300 million in circulation. However, due to alleged shady dealings and accusations, the platform fell apart in November 2022, leading to enormous turmoil in the cryptocurrency ecosystem. 

The fall of FTX led to heightened regulatory oversight of digital assets in the United States and other countries around the globe. According to the company’s new management currently overseeing the present draft creditor repayment plan, exchange owes its customers over $8.5 billion. 

Over $6.4 billion of the deficit was in the form of stablecoins and fiat currency that have been misappropriated. Last month, FTX 2.0 initiated an action against disgraced founder Sam Bankman-Fried and his team to recover some of the misappropriated funds.

Featured image from Blockworks, chart from

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