How Much FTX Customers Are Getting

ADA, FLOKI, and ZRX charts, plus how much FTX customers are getting back

Author

Jonathan Morgan
May 08, 2024

OVERVIEW

How Much FTX Customers Are Getting

It’s another flat day today, but there are some altcoins that have begun to move out of consolidation, like TRON ($TRX), Tellor ($TRB), and RUNE ($RUNE). A sign of things to come? Our eyes are on it. 👀

In today’s Litepaper: a sort of ‘special’ edition that focuses on what FTX’s customers and stakeholders will get when the court approves it. Hint: better than you think. 📰

Also on deck: A look at three altcoins near major breakout levels: Cardano ($ADA), Floki ($FLOKI), and 0x ($ZRX).

Before we dive in, here’s today’s crypto market heatmap:

And here’s a look at crypto’s total and altcoin market cap YTD:

NEWS
Crypto Sitting Near Breakout Levels ⚠️

A good chunk of the market continues to consolidate, but some altcoins are at or near some major breakout levels. 🎚️

ADAUSD Daily Chart - Click to enlarge.

Cardano’s parked right on top of the 50% Fibonacci retracement at $0.465 and a little below the upper trendline ($0.475) of a prior bull flag. If bulls can get enough momentum moving, some analysts see a fast drive toward the $0.60 value area.

However, bulls shouldn’t get too excited. Analysts warn that a close below $0.441 could trigger another leg lower.

Sentiment for $ADA continues to trend higher and may even flirt with moving into extremely bullish levels (75+). It’s not hard to understand why Stocktwits users here are looking at Cardano with some green in their eyes - nearly everything else in the red.

ZRXUSD Daily Chart - Click to enlarge.

$ZRX has a fairly straight forward looking chart here. Bears are getting giddy for any daily close at or below $0.46, and the bulls are eyeing a close above 61.8% Fibonacci retracement at $0.51.

If the Stocktwits sentiment and message data above look familiar, well, they should. Because they’re exactly what Cardano’s look like.

FLOKIUSD Daily Chart - Click to enlarge.

This zone for $FLOKI is volatile as hell. Bulls full of happy and joy feelings above $0.000193, but sadness full to top of cry bottle below $0.000155.

If you want to know how much memecoin mania has fizzled over the past few weeks, one look at Stocktwit’s sentiment and message volume scores will tell you. If there’s a breakout above or below, expect some wild swings in that sentiment score and see that volume move from normal to extremely high in no time.

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NEWS
FTX's Payout: Little Comfort for the Little Guy? 🤔

Seventeen months into bankruptcy, FTX has finally scribbled down a plan. ✒️

They say it's to pay back everyone they owe—sounds noble, right? Don't get your hopes up just yet. As they proudly announce their $14.5 to $16.3 billion recovery pot, it's essential to note what's missing from this grand gesture: nearly all the $BTC and $ETH that vanished into the, um, ether in 2022.

The Devil in the Details 😈

The grand plan, of course, ensures full repayment for non-governmental creditors. But let's dig into what that means. These non-government creditors will supposedly see 100% of their claims plus interest. Meanwhile, a convenience class for claims under $50,000 promises a repayment of 118% within just 60 days of the plan's approval. It sounds like a dream, but it's dressed in bureaucratic red tape.

The Lawyers Made Some Mad Bank 🤑

In December 2023, it was estimated that bankruptcy fees since December 2022 were roughly $1.45 billion, with a customer shortfall of $1.422 billion. Cointelegraph estimated that the attorneys were burning $53,000 every hour, or approximately $1.4 million daily. 

Let's be generous and assume the average daily burn from just the legal costs is $1.2 million daily. From December 5, 2022, to March 30, 2024, that's a whopping $614,400,000. 

Where Does the Little Investor Fit? 🤏

FTX's settlements read like a who's who of the financial elite making backdoor deals. With the IRS, a $24 billion claim is settled for pennies on the dollar—a mere $200 million in cash. Meanwhile, the Department of Justice might sprinkle over $1.2 billion of forfeiture proceeds to customers and creditors without any extra hassle or cost—how generous, considering it's not their money to begin with.

The whole scheme culminates in what FTX frames as a heroic effort by their CEO, John J. Ray III, and the board to secure a fair deal for all involved. They lavish thanks on every government body for their tireless efforts, all while the small investor's voice gets lost in a sea of legalese and financial jargon.

A Comparison of Outcomes ⚖️

To be fair, though, nothing is perfect. And really, what John Ray’s team has pulled off is waaaaaaay better than what's happened to customers with other platforms.

Cases in point: Celsius and Voyager.

Celsius 🌡️

Celsius took a unique turn by morphing into a new entity focused on crypto mining and staking, hoping to use this business to repay creditors. The transition not only promised repayment in a mix of cryptocurrency and stock but also kept the venture alive, providing a glimmer of hope for continuous recovery. The plan sanctioned by Judge Martin Glenn leveraged Celsius's remaining assets and a significant external investment to repay a staggering $4.7 billion owed to over 100,000 creditors.

So how much did customers get back?

You could infer a partial yet significant repayment ranging from 40% to 60% of the original customer assets. This estimate assumes that Celsius's cryptocurrency value and the potential revenue generation from the new mining and staking operations would contribute meaningfully to creditor repayment.

Voyager: An Epic Screwjob 😡

To say Voyager's outcome(s) was disappointing is an understatement. Ordering a pepperoni pizza and getting a broccoli salmonella pizza is better than what happened to Voyager's customers.

As of mid-April 2024, the estimate is only 25 to 35% of customer cryptocurrency deposits are recoverable. And if you're reading this and you are one of those unfortunate victims and haven't done anything about it, you are likely shite out of luck. April 20 was the final day to get your check; any unclaimed checks after go to some magical holding place no one knows about. 🧨

NEWS
Crypto News In Three Sentences 📰

🔍 Crypto's Growing Political Influence
U.S. cryptocurrency super PACs have amassed over $102 million for the upcoming congressional elections, aiming to support candidates favorable to digital assets. This financial muscle highlights the crypto sector's strategic efforts to sway policy amidst increasing regulatory scrutiny. The significant contributions from major players like Coinbase and Ripple Labs underline the industry's commitment to shaping a favorable legislative environment. Reuters has more.

💳 MoonPay and BitPay Enhance Crypto Transactions
MoonPay has teamed up with BitPay to streamline the sale and transfer of cryptocurrencies to bank accounts or debit cards, enhancing transaction speed and ease. This collaboration is part of MoonPay's broader strategy to improve access to web3 and simplify the conversion of crypto to fiat. The partnership reflects a significant step towards making crypto transactions as seamless as traditional banking operations. From The Block.

🎤 Pro-Crypto Presidential Candidate Speaks at Consensus 2024
Robert F. Kennedy Jr., an independent U.S. presidential candidate, is set to address his pro-cryptocurrency stance at the upcoming Consensus 2024 conference. Kennedy, diverging from traditional Democratic views, supports cryptocurrency and self-custody, signaling his unique position in the political landscape. His participation in the conference underscores the increasing politicization of cryptocurrency in U.S. elections. More from CoinDesk.

📉 Grayscale Withdraws Ethereum ETF Proposal
Grayscale has withdrawn its filing with the NYSE Arca for an $ETH Futures ETF, a move that raises questions about its strategies amidst regulatory challenges. The withdrawal comes ahead of a crucial SEC decision date, puzzling industry observers about the implications for Grayscale's future submissions, including its efforts to launch a spot Ethereum ETF. This development may affect the broader landscape of cryptocurrency investments and regulatory engagements. CryptoSlate has more.

⚖️Ethereum's Legal Battle in U.S. Court
Hodl Law is set to challenge the SEC's classification of Ethereum in a significant court case, arguing that $ETH transactions should not be considered securities. The upcoming court hearing will examine the SEC’s regulatory approach amid intensifying scrutiny of the cryptocurrency sector. This case, alongside others like Consensys’ lawsuit against the SEC, could pivotaly influence the regulatory framework for cryptocurrencies in the U.S. From CoinGape.

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