FTX did not restart the exchange, liquidating 100% of assets to refund customers

The price of FTX's native FTT token continues to suffer from exchange turmoil a year after the platform shut down. Meanwhile, FTX founder Sam Bankman-Fried (SBF) continues to wait for the March trial.

FTX wants to bring customers completeness

A report from Reuters indicates that the FTX exchange intends to help customers amid the ongoing bankruptcy proceedings. Based on the report, the platform is liquidating assets in an attempt to settle with creditors. The exchange abandoned plans to restart, instead calling for a full liquidation and payment to customers as the better alternative.

While total customer recovery sounds like a good thing, the reality is there's a twist. The exchange will refund customers up to the USD value of their assets in November 2022. This means users will be refunded crypto values at low levels during the cycle when Bitcoin (BTC), Ethereum (ETH) and Solana (SOL) were trading for $18,000, $1,300 and $18 respectively.


1-day chart: BTC/USDT, ETH/USDT, SOL/USDT. Source: TradingView

This decision was made after months of negotiations with potential contractors and investors. Incident after incident showed that no one agreed to spend enough money to rebuild the FTX exchange. FTX attorney Andy Dietderich confirmed this at a bankruptcy court in Delaware, based on the report. Dietderich cited the following reasons for not attracting investors.

FTX was never what it seemed, “it was an irresponsible sham created by a convicted felon”.
SBF never built the underlying technology or administrative requirements necessary to run the company as a viable business. The costs and risks of creating a viable exchange from what SBF leaves behind are too high.
However, the decision to repay customers could set a precedent in the cryptocurrency industry in handling bankruptcy cases and refunding customers. Within an hour of the news, the native FTT token price fluctuated 42%, moving from $2.60 to $3.25 before falling to $2.10. The surge in FTT token value reflects market optimism but also highlights the volatile nature of the cryptocurrency.

FTT price outlook

With huge cost pressure due to the confluence between the 50 and 100-day Simple Moving Average (SMA) at $3.12 and the horizontal line at $2.83, FTT price is likely to fall further. The relative strength index (RSI) also points south and shows bearish momentum.

FTT may soon test the psychological level of $2. The location of both the Awesome Oscillator (AO) and the Moving Average Convergence Divergence (MACD) in the negative zone highlights the bearish thesis.


FTT price chart. Source: TradingView

However, if the bulls seize the opportunity to buy on the dip, FTT price could rise to surpass the respective levels of $2.83 and $3.12. However, for the bearish thesis to be invalidated, the FTX token price must print a candle close above $5.59 on the daily timeframe. This represents a 145% increase from the current level.