No FTX Payouts This Week Amid Social Media Misleading Rumors

Speculation is rife on crypto social media that the troubled exchange FTX may begin distributing around $11 billion to creditors starting October 1.

“MartyParty” informed his 116,000 followers on X to liquidate their ETH, ADA, and DOT holdings before the upcoming distributions, while promoting SOL and SUI.

In another analysis, crypto advisor Dan Held noted to his 720,000 followers on X, “$16B in distributions from FTX begins tomorrow,” although he suggested that speculative traders would likely reinvest.

“Crypto Rover” also contributed to the FUD by misreporting that FTX distributions would kick off this week to his 840,000 followers on X.

Setting the Record Straight

However, the reality is somewhat different; therefore, there is little cause for panic selling or any associated FUD. According to official sources, FTX’s legal team will be present at a court hearing on October 7th to finalize the repayment plan, meaning no distributions will occur this week.

Additionally, if the revised repayment plan is accepted, creditors with claims under $50,000 might start receiving payments by the close of 2024. Larger claims may not receive any distributions until the first or second quarter of 2025.

On September 29, FTX creditor activist Sunil Kavuri stated that significant (X) accounts were “spreading false information.” Nonetheless, he estimated that half of the claims, approximately $5.5 billion, are unlikely to be reinvested in crypto.

FTX Distribution

False: Large accounts spreading misinformation, FTX distribution has begun or starts on 1st Oct, etc. and $16bn inflow
October 7: Plan hearing

Approx No.
Est. $5.5bn claims bought (50%) – not crypto investors – won’t reinvest in crypto

Claims <$50k:…

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

In June, creditors led by Kavuri expressed opposition to the repayment strategy favoring distribution in-kind rather than cash, which would incur tax liabilities.

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

FTX DISTRIBUTIONS DO NOT BEGIN TOMORROW.

Here are the facts:⁠⁠

– October 7, 2024 court hearing will confirm FTX’s Chapter 11 reorganization plan.
– If approved, it will set the stage for the repayments to commence.
– Post-Hearing Payments: Payments are… pic.twitter.com/7uTG5qwP8v

— Ran Neuner (@cryptomanran) September 29, 2024

Despite the unsubstantiated FUD, crypto markets experienced a sell-off during Monday morning trading in Asia, with the total market cap decreasing by 2.7% and Bitcoin dropping to the $64,500 level after exceeding $66,000 over the weekend.

FTX Token Rises

The native token of the beleaguered crypto exchange, FTT, has surged over 50% in the past 24 hours. The exchange asset reached a seven-month high of $2.70 on Sunday before falling back to $2.19, still representing a 51% increase for the day.

FTT has increased over 70% in the last fortnight, primarily due to reimbursement rumors. Nonetheless, the asset remains down 97.5% from its all-time high of $84 in September 2021.