FTX, a cryptocurrency exchange facing financial turmoil, has decided not to resume its operations and will instead focus on liquidating assets to repay its customers, according to Reuters. However, the refunds will be calculated based on Bitcoin’s value in November 2022, when it was valued below $18,000, leading to dissatisfaction among FTX customers.
The decision was upheld by US Bankruptcy Judge John Dorsey, who cited adherence to US bankruptcy laws. FTX also stated that not all claims will be immediately addressed, as they need to be reviewed for legitimacy.
Despite initial hopes to rejuvenate operations through partnerships, FTX CEO John J. Ray III’s plans have been halted due to financial deficits. Additionally, former CEO Sam Bankman-Fried’s acquisitions have depreciated in value, deterring potential investors.
FTX has managed to recover over $7 billion in assets for customer repayments and has negotiated with regulatory bodies to prioritize refunds. However, the announcement of the repayment strategy led to a 40% drop in the value of FTX’s native token, FTT.
Former CEO Sam Bankman-Fried has been convicted on multiple fraud charges and has faced legal repercussions, including a significant prison term. As a result of these challenges, FTX’s native token, FTT, is currently trading below $2, marking a decrease of over 14% in the past 24 hours, according to CoinGecko data.