Outside Source
Rumors abound on crypto social media suggesting that the embattled exchange FTX will start distributing as much as $11 billion to creditors on Oct. 1.
“MartyParty” told his 116,000 X followers to sell their ETH, ADA, and DOT before this week’s distributions while shilling SOL and SUI.
Meanwhile, crypto advisor Dan Held told his 720,000 X followers, “$16B in distributions from FTX will start happening tomorrow,” but suggested that degens would buy back in.
“Crypto Rover” also added to the FUD misreporting that FTX distributions would begin this week to his 840,000 X followers.
Debunking The FUD
However, the truth is a little different, so there is little need for panic selling or any of the FUD. According to official documents, FTX’s legal team will attend a court hearing on Oct. 7th to finalize the repayment plan, so there will be no distributions this week.
Moreover, if the revised plan is approved, smaller claims under $50,000 may begin receiving distributions by the end of 2024. Larger claimants may not see any distributions until the first or second quarter of 2025.
On Sept. 29, FTX creditor activist Sunil Kavuri said large (X) accounts were “spreading false info.” However, he estimated that half of the claims, around $5.5 billion worth, won’t be reinvested in crypto.
FTX Distribution
False: Large accts. spreading false info, FTX distribution has started and/or start on 1st Oct etc and $16bn inflow
7th October: Plan hearingApprox No.
Est. $5.5bn claims bought (50%) – not crypto investors – won’t reinvest in cryptoClaims <$50k:…
— Sunil (FTX Creditor Champion) (@sunil_trades) September 29, 2024
In June, creditors led by Kavuri objected to the repayments favoring reimbursement with in-kind assets rather than cash, which would be taxable.
CNBC crypto trader Ran Neuner also dispelled the FUD stating that distributions would start within 60 days of the plan becoming effective.
FTX DISTRIBUTIONS DO NOT BEGIN TOMORROW.
Here are the facts:
– October 7, 2024 court hearing will take place to confirm FTX’s Chapter 11 plan of reorganization.
– If approved, it will pave the way for repayments to begin.
– Post-Hearing Payments: Payments are… pic.twitter.com/7uTG5qwP8v— Ran Neuner (@cryptomanran) September 29, 2024
Despite the unfounded FUD, crypto markets were selling off during Monday morning trading in Asia. Total capitalization had fallen by 2.7%, with Bitcoin dropping to the $64,500 level after topping $66,000 over the weekend.
FTX Token Surges
The native token for the embattled crypto exchange, FTT, has surged more than 50% over the past 24 hours. The exchange asset spiked to a seven-month high of $2.70 on Sunday before retreating to $2.19, which was still up 51% on the day.
FTT has now gained more than 70% over the past fortnight, largely driven by reimbursement rumors. However, the asset still remains down 97.5% from its all-time high of $84 in September 2021.
This article first appeared at CryptoPotato
