The lessons learned from FTX will likely be key talking points at this year’s World Economic Forum (WEF) meeting in Davos, Switzerland. The exchange’s Debtors have finalized plans to repay creditors after it collapsed in 2022.
Even as FTX’s former CEO Sam Bankman-Fried awaits his sentencing trial after being convicted on eight counts of fraud, the elite of the financial world gathers in Davos, Switzerland. The conference’s theme is “rebuilding trust,” which is what the crypto industry is arguably trying to do.
FTT Surges After Bitcoin ETF Approvals
Around 75% of Americans have little to no trust in crypto. The collapse of FTX, piecemeal financial reporting in media, and exclusive jargon have alienated the American public. High-profile crypto court proceedings, including the trial of Bankman-Fried and the charging of former Binance CEO Changpeng Zhao, were among the many events that shattered trust in the industry.
Coinbase CFO Alesia Haas, who is attending the Davos conference, said the confluence of finance leaders is good for crypto. Its a chance to push regulation forward, she says.
“I’m really excited about is Davos would really help us with our grow-broad and grow-deep international strategy. There’s many global leaders here. There’s an opportunity to talk about crypto regulation.There’s an opportunity to talk about how crypto will really benefit their users.”
The failure of the Terra Luna ecosystem started off the crypto winter in earnest. Prices began rising after several investment firms filed papers to launch a Bitcoin exchange-traded fund. The US Securities and Exchange Commission approved 11 such funds last week.
FTX Token Price | Source: BeInCrypto
The recent ETF approvals saw the native token of FTX, FTT, peak at $3.33 in the past seven days. Solana, also an FTX-related altcoin, surged to over $100. Both tokens suffered significantly after the FTX collapse.
FTX Creditors Want to be Paid in FTT
The FTT price increase has caused FTT creditors to demand compensation in the FTT token. They filed court papers alleging that the bankruptcy plan, finalized at the end of last year, be amended so they could benefit from the increase in the price of the FTT token. However, the court argued that the compensation reflected the fair market value of the assets when the exchange filed for bankruptcy.
FTX filed for bankruptcy in 2022 after a tweet revealed the dependence of its sister quant trading firm, Alameda Research, on the FTT token. The bankruptcy estate received approval from the courts to sell the exchange’s crypto assets in multi-million dollar tranches at the end of last year. FTX also has significant real estate to dispose of, including a luxury property worth $256M in the Bahamas.
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