The upcoming week could mark an important juncture for the cryptocurrency market, as the bankrupt derivatives exchange FTX repayments process begins – probably one of the most highly anticipated repayment processes.
But, with nearly $16 billion set to be returned to crypto traders, analysts think buying pressure for Bitcoin, and especially altcoins is set to increase exponentially. This repayment wave will be a great opportunity for investors who missed the chance for investment during the August market correction.
FTX Repayments to Begin Soon: Key Dates for Claimants
These future repayments join the lengthy aftermath of the infamous collapse that had left many traders to incur huge losses because of the notorious actions made by its former CEO, Sam Bankman-Fried. In response to this situation, the exchange revised the reorganization plan and opened up the chance for full repayments, as per the given timeline, to the affected traders.
The distributions, which all investors are looking forward to, are expected after one of the three “omnibus hearings” scheduled on October 22, November 20, and December 12, 2024. The hearings should help in the process of the overall repayment to all claimants.
If the Chapter 11 plan is approved by the District of Delaware before October 7, victims’ disbursements may start well before the end of the year. Unfortunately, anyone who didn’t get around to filing claims by September 29, 2023, is no longer eligible for reimbursement.
$16 Billion FTX Repayments to Ignite Massive Crypto Bull Run?
Crypto space bursts with excitement, with many speculating that this upcoming money injection could create the biggest bull run ever.
With a big chunk of the FTX repayments expected to flow back into the market from the $16 billion, this is one very unique situation wherein investors that are already in cryptos will benefit from it.
The recipients will probably try to reinvest their repayments into cryptocurrencies, with a majority flowing into leading cryptocurrencies like Bitcoin and Solana. This could mean significant market growth and also a very important period to watch in the coming final months of this year.
However, in May this year, one of the attorneys representing the creditors of the exchange Sunil Kavuri opposed the plan for compensation on the basis that debts should be reimbursed in cryptocurrency and not converted into their dollar value at the time of bankruptcy.
SEC Throws Wrench in Repayment Plan
Earlier this month, the Securities and Exchange Commission raised concerns that could jeopardize the FTX repayments plan and delay progress in resolving the debt obligations of the now-defunct cryptocurrency exchange.
Regulators have thrown new uncertainty into the exchange’s highly scrutinized bankruptcy case, challenging the company’s plan to repay creditors using stablecoins. Because of that, Coinbase’s CLO Paul Grewal has slammed the SEC saying that the regulator wants to maintain uncertainty over crypto rules.
An August 30 filing noted a potential complication in the proposed restitution process: While stablecoin payments aren’t necessarily unlawful, they can have legal consequences on account of the crypto assets involved.
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