The FTX Compensation Plan: A Glimpse into the Future for Creditors and NFT Holders
Compensation Details and Exclusions
The proposed compensation plan, filed in a Delaware bankruptcy court, estimates that creditors and customers could receive between $14.5 billion and $16.3 billion in total. However, this figure excludes holders of FTX’s native token, FTT, which the court documents have deemed ineligible for claims and are set to be “canceled or released.”
Conversely, there is a silver lining for those with NFTs currently locked on the FTX NFT platform. The plan schedules these assets for return to their rightful owners, providing some relief to investors who feared their digital assets might be lost forever.
Recovery Rates and Payment Plans
Previously, those who lost FTT tokens in the collapse were to receive cash payments based on their holdings. Meanwhile, this change in the compensation strategy highlights the complexities involved in unwinding the financial tangles of a major cryptocurrency exchange’s bankruptcy, ultimately aiming to resolve the challenging financial scenarios left in the aftermath.
The Fall of a Crypto Titan
The collapse of FTX has had far-reaching implications, particularly in the NFT space. Notable NFTs affected include those minted on the Solana blockchain by FTX itself, featuring collaborations with high-profile entities such as Coachella and Tomorrowland music festivals, NBA star Steph Curry, and the Mercedes-AMG Petronas Formula One team.
On the day FTX filed for Chapter 11 bankruptcy, FTT was trading at $2.62, a stark contrast to its 2021 peak of $80.50. While the token has seen some fluctuations since then, it currently stands at approximately $2.14.
FTT’s Role in Business Dealings
Bankman-Fried had previously used FTT as leverage in various business transactions. This includes a notable $30 million payment, largely made in FTT, to NFL star Tom Brady and his ex-wife, supermodel Gisele Bündchen, for their roles in FTX commercials.
The unfolding of the FTX bankruptcy case continues to be a pivotal moment for the crypto industry, highlighting the need for robust regulatory frameworks and transparent business practices. For more insights into the challenges and opportunities in the crypto recruitment landscape, explore our detailed analysis on navigating Web3 recruitment amidst crypto calamities.
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Edited by Andrew Hayward
