FTX Creditors' Dilemma 🤦
FTX plans full pay back, plus billions in compensation. Creditors want to vote against it. Trump loves crypto. Biden wants veto. Robinhood $157M 2024 Q1 profit. Meme Coin Index. Top Degen countries.
Hello, y'all. Today is about the not so sweet pay back … 🤔
Wish that I could cash that check, so pay me back (oh yeah) … 🎶
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Good day FTX creditors!
FTX is paying you all back.
Within 60 days of court approval.
But you are not gonna forgive them for this.
Payback to creditors - $15 billion
Losses to creditors - $10 billion +
And they are calling it "return of 100% of claims plus interest."
The Offer: Repay all creditors plus interest, with 118% going to those with claims under $50,000 (supposedly 98% of creditors).
The Catch: Reimbursement is based on asset value at the time of FTX's bankruptcy (November 2022), not current prices.
The Discontent: BTC was worth $18,562 in November 2022 and $61K now. This shortchanges creditors, especially since crypto markets have boomed since the crash (Bitcoin is up nearly 280%).
Unhappy are we? Sunil Kavuri, representative of the largest FTX creditor group, advises voting against the bankrupt crypto exchange's reorganisation plan.
FTX has money
FTX will repay nearly all customer funds, exceeding earlier estimates. Initially, they expected to return 90%, then revised it to full repayment.
They've been busy collecting assets and liquidating investments, and now have a much bigger pot of cash than originally thought.
The FTX estate continues to sell its holdings of locked Solana, with a third auction kicking off this week. An undisclosed amount of locked Solana, part of a total 41 million the estate is selling. The estate already sold a large portion in March and 1.8 million more last month. Prices ranged from $85 to $110 per token.
FTX also sold its shares (8%) of Anthropic AI for $884 million in March, which accounted for a majority of FTX’s stake in the firm.
They deny the recent crypto surge helped (though it probably didn't hurt).
Good news for NFT holders. People with Solana NFTs stuck on the FTX platform will get their digital assets back.
Holders of FTX's native token - FTT? Get NOTHING. No compensation.
The day of FTX’s Chapter 11 bankruptcy, FTT traded at $2.62 - 97% dive from its 2021 all-time high of $80.50. And it still stays low.
So, what happens next?
A Delaware bankruptcy court needs to approve the plan. There's a hearing scheduled for June.
Regulators like the IRS and CFTC also have claims, but they agreed to take a backseat so FTX users can get paid first.
And is the money coming back to crypto?
FTX surely caused a dent to altruism cause👇
Block That Quote 🎙️
J. Christian Giancarlo, former head of the United States Commodity Futures Trading Commission (CFTC).
“The global future is all of the above. Crypto, CBDCs, stablecoins and more”
Forget the "CBDCs vs. crypto" debate, Giancarlo says.
The real future embraces all three: cryptocurrencies, stablecoins, and central bank digital currencies (CBDCs).
He believes US regulations stifle crypto innovation.
“Let’s set standards for digital currencies, sovereign and non-sovereign CBDCs, and stablecoins that are worthy of human liberty, and people everywhere who aspire to liberty.”
Giancarlo emphasised the growth of digital currencies:
CBDC Race: 98% of global GDP is exploring CBDCs, compared to 35% in 2020.
Stablecoin Surge: Public stablecoin transactions reached $11 trillion, nearly surpassing Visa.
Crypto's Rise: Bitcoin's market cap is now bigger than the Swiss franc.
Trump Loves Crypto. Biden Plans To Veto
Things he said during a special event for Trump NFT holders at his Mar-a-Lago resort in Florida - He sure loves crypto now.
“Crypto is moving out of the US because of hostility towards crypto … We’ll stop it because I don’t want that—if we’re going to embrace it, we have to let them be here.”
“[Gary] Gensler is very much against it, the Democrats are very much against it … But I’m good with it.”
About the “Jeo Boden” the memecoin: “That's a lot of money for a coin, I don't like that investment."
About crypto donations: “If you can’t, I’ll make sure you can,”...“Can we donate to the Trump campaign using crypto? I believe the answer is yes.”
Biden “doesn’t even know” what cryptocurrency is.
Meanwhile Biden wants to veto
President Biden plans to veto a resolution that aims to countermand an SEC crypto rule. The U.S. House of Representatives passed a resolution to roll back the SEC's anti-crypto banking policies.
The resolution aims to ensure that significant changes in crypto banking policies go through proper public rule-making processes.
In the Numbers 🔢
$157 million
Robinhood 2024 Q1 profit.
Defied expectations, despite being hit with a Wells Notice very recently.
Key Takeaways
Crypto notional trading volume surged 224% year-over-year to $36 billion, significantly outpacing the growth in equity trading.
Overall revenue climbed 40% to $618 million, with net income reaching $157 million compared to a loss last year.
Crypto trading fuelled nearly 40% of Robinhood's transaction revenue.
Robinhood's crypto custody holdings surged 78% to $26.2 billion, likely due in part to rising crypto prices.
But, a shadow hangs over Robinhood's crypto business. Concerns about potential regulatory hurdles for the company moving forward.
Read: SEC Can't Stop Suing 👨⚖️
US, UK, and Philippines Top Crypto Risk-Takers
A new report reveals the top contenders for the title of "Degen Nation" (degen being short for "degenerate" in this context).
Who are the biggest risk-takers?
USA! USA! USA! They have 16.8% share of traffic on platforms used to analyse smaller, riskier cryptocurrencies.
The UK follows closely with 6.16%.
The Philippines rounds out the top 3 with 5.07%.
There’s a Memecoin Index
MarketVector (a subsidiary of American asset management giant VanEck) launched the Meme Coin Index, which has returned 137.96% so far this year.
The Surfer 🏄
Binance denies allegations of market manipulation by DWF Labs. Anonymous source claims Binance investigators found $300 million worth of wash trading by DWF in 2023. Binance spokesperson rejects the reports and emphasises their robust market surveillance program.
Trader loses over a million dollars in cryptocurrency due to 0L Network hard fork. Hard fork was not approved by the community and resulted in a wipeout of 4% of the total supply. Trader purchased 147 million Libra tokens worth $1.47 million before joining the protocol to assist with marketing efforts.
Ghana Post has launched a crypto stamp collection to honour the king's 25-year reign. The physical stamps are linked to unique NFTs on the blockchain. The crypto stamps are limited to 7,200 pieces and cost 250 Ghanaian cedi ($18) per stamp.
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