No imminent payouts despite social media FUD

Rumors abound on crypto social media suggesting that embattled exchange FTX will begin distributing up to $11 billion to creditors on October 1st.

“MartyParty” told his 116,000 X followers to sell their ETH, ADA, and DOT ahead of this week’s distributions while soloing and SUI.

Meanwhile, crypto advisor Dan Held he said his 720,000 X followers, “$16 million in FTX distributions will start rolling tomorrow,” but suggested that degens would buy again.

“Crypto Rover” also added to the FUD misinformation that FTX distributions would start this week to his 840,000 X followers.

Debunk the FUD

However, the truth is a little different, so there is little need for panic sales or any FUD. According to official documents, FTX’s legal team will attend a court hearing on October 7 to finalize the repayment plan, so there will be no distributions this week.

Also, if the revised plan is approved, smaller claims under $50,000 could begin receiving distributions in late 2024. Larger claimants may not see any distributions until the first or second quarter of 2025.

On September 29, FTX creditor activist Sunil Kavuri said the big accounts ( X ) were “spreading false information.” However, he estimated that half of the claims, about $5.5 billion, will not be reinvested in crypto.

FTX distribution

False: large acts. spreading false information, FTX distribution has started and/or starts on October 1st, etc. and an inflow of $16 billion
October 7: Hearing of the plan

Not approx.
Est. Claims of $5.5 billion purchased (50%), non-crypto investors, will not reinvest in crypto

Claims

— Sunil (FTX Creditor Champion) (@sunil_trades) September 29, 2024

In June, creditors led by Kavuri opposed the repayments, favoring repayment with assets in kind instead of cash, which would be taxable.

CNBC crypto trader Ran Neuner also dispelled the FUD by stating that distributions would begin within 60 days of the plan becoming effective.

FTX DISTRIBUTIONS DO NOT START TOMORROW.

These are the facts: ⁠

– The October 7, 2024 court hearing will take place to confirm FTX’s Chapter 11 reorganization plan.
– If approved, it will pave the way for reimbursements 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 2.7%, and Bitcoin fell to the $64,500 level after breaking above $66,000 over the weekend.

Increase in FTX chips

The native token of the embattled crypto exchange, FTT, is up more than 50% in the last 24 hours. The exchange-traded asset rose to a seven-month high of $2.70 on Sunday before retreating to $2.19, still up 51% on the day.

FTT has gained more than 70% over the past fortnight, largely driven by refund rumours. However, the asset is still down 97.5% from its September 2021 all-time high of $84.

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