FTX’s bankruptcy estate announced Tuesday that creditors and customers are likely to receive between $14.5 billion to $16.3 billion in total compensation—but that doesn’t include payouts for holders of FTX’s ill-fated FTT token.
Once regarded as the defunct exchange’s native token on Ethereum, allowed claims regarding FTT are to be “canceled or released,” a plan filed in Delaware bankruptcy court states. Conversely, those with NFTs currently trapped in the FTX NFT platform due to the company’s collapse are set to receive the assets back.
Around 98% of FTX creditors with allowed claims less than $50,000 will also receive 118% of what they’re owed if the plan receives court approval. Based on the USD value of crypto prices when FTX buckled in 2022, the payment represents a little interest on top of funds customers lost 18 months ago, when crypto prices were broadly much lower than they are now.
Creditors and customers who lost FTT in FTX’s collapse were previously set to receive cash payments based on their holdings, according to an FTX reorganization plan filed last December. The plan also stipulates that NFT-related claims would see their corresponding JPEGs returned.
FTX founder and former CEO Sam Bankman-Fried was handed a 25-year prison sentence in March for stealing $8 billion from customers, among other misdeeds. The disgraced crypto wunderkind secretly siphoned billions of dollars from the exchange to purchase Bahamian real estate, bankroll venture investments, and amass influence through political donations.
Most of Bankman-Fried’s wealth, which topped out at an estimated $26.5 billion, was made up of ownership in FTX and FTT, per Bankman-Fried’s profile on Forbes.
Among the NFTs impacted by FTX’s collapse are Solana NFTs minted by the platform itself, including those offered by concert festivals Coachella and Tomorrowland, NBA star Steph Curry’s 2974 NFT collection, and Formula One-themed NFTs from the Mercedes-AMG Petronas racing team.
FTT’s collapse is synonymous with the fatal tailspin that wrecked FTX in November 2022. A report from CoinDesk revealed that Alameda Research, a trading firm owned by Bankman-Fried, held $4 billion worth of FTT on its balance sheet at the time.
After Changpeng Zhao, founder and then-CEO of Binance, moved to sell the exchange’s FTT holdings, the token nosedived, sparking a flood of investors withdrawing cash from FTX. Failing to process withdrawals, that eventually forced FTX to admit it didn’t hold 1:1 reserves of customer assets.
The day FTX filed for Chapter 11 bankruptcy, FTT traded hands at $2.62, down 97% from its 2021 all-time high of $80.50. Jumping occasionally since then on bankruptcy-related remarks, FTT is currently worth $2.14, according to CoinGecko.
Aside from being used to inflate the balance sheets of Bankman-Fried’s business empire, the one-time crypto mogul leveraged FTT in some business dealings. That includes a $30 million payment made almost entirely of FTT to the former NFL star Tom Brady and his ex-wife, supermodel Gisele Bündchen, for appearing in several FTX commercials.
Edited by Andrew Hayward
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