The FTX Token ($FTT), the utility token of the failed FTX crypto exchange, has experienced a major surge in price over the past seven days. According to CoinMarketCap, the value of $FTT rose by around 146%.
After the FTX crypto exchange fell on November 11, 2022, the price of $FTT dropped from around $25 per token to around $1.3 per token in hours. Most crypto traders had lost confidence in the token. However, the token could soon make a comeback based on its performance in the past week.
Comments made by SEC Chair Gary Gensler sparked the surge of the $FTT token. According to Gensler, he was open to the FTX crypto exchange resuming business within the confines of the law. Gensler comments follow reports that three bidders were angling to take over FTX. The bidders include crypto exchange Bullish, run by former NYSE president Tom Farley.
Gensler made the comments during a CNBC interview. He noted that if Tom Farley or anyone else had an interest in the business, he would not oppose it as long as they “do it within the law.” The SEC Chair added that any prospective owner would have to build confidence in investors.
That would include proper disclosures and ensuring there was no commingling of functions, trading against customers, or using the crypto assets for personal gain.
Despite the increased interest in the FTX Token, the prospective buyers of the exchange have yet to signal their intention to revive the FTX Token.
The Rise and Fall of FTT Token
While the price of the FTT Token has risen following reports of FTX’s revival, the price is still down. As of November 10, 2023, the token is trading at $2.79. That is a 96.37% discount on its all-time-high price of $85.02 on September 09, 2021.
The token was crucial to the collapse of FTX in 2022. Once the FTX exchange cashed out Binance’s equity stake in July 2021 using the FTX Token, Binance liquidated its holdings, citing new information it had come across. The decision set off a domino effect that ended with the shuttering of the FTX exchange.
Later, it was revealed that Alameda Research, the FTX exchange’s trading arm, had executed loans worth billions of dollars using $FTT tokens as collateral. Additionally, it emerged that Alameda Research had commingled funds from FTX users in various deals.
SBF Sentencing
On Thursday, November 02, 2023, Sam Bankman-Fried, the founder of FTX, was found guilty on several counts of fraud, money laundering, and violation of campaign finance laws. He now faces a maximum sentence of 110 years. In the past, judges have often sentenced offenders to a fraction of the time they would have served. However, depending on the scale of the crime, a judge may opt to impose the maximum sentence. A good example is Bernie Madoff, who was handed a 150-year prison sentence.
SBF is due to be sentenced on March 28, 2024. If the judge decides to sentence him to 110 years, his appeal would be hopeless. However, he could end up receiving a shorter sentence, as happened to Theranos founder Elizabeth Holmes, who received just over 11 years on a possible maximum sentence of 80 years.
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