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Tag: crypto exchange FTX

  • Colossal Buying Pressure For Bitcoin And Solana As FTX Plans $16B Distribution, Expert

    Colossal Buying Pressure For Bitcoin And Solana As FTX Plans $16B Distribution, Expert

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    In a significant development for the cryptocurrency industry, FTX, the exchange that collapsed in November 2022 under the leadership of convicted Sam Bankman-Fried, is preparing to distribute a staggering $16 billion in cash to its customers, which could lead to significant gains for Bitcoin (BTC) and Solana (SOL) prices. 

    Crypto researcher Xremlin has predicted that a considerable portion of this cash will flow back into the crypto market, serving as a catalyst for growth towards the end of the year. 

    FTX $16 Billion Cash Injection 

    In a recent social media post, Xremlin highlighted the significance of the distribution, emphasizing that it involves returning $16 billion in cash to individuals already involved in the crypto space. 

    Xremlin believes that a significant portion of this money will be reinvested in the market, specifically in purchasing various tokens, including Bitcoin and Solana, creating significant buying pressure and price growth for both cryptocurrencies.

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    The source of this massive cash injection can be traced back to FTX’s agreement with US government agencies, where assets acquired with misappropriated customer funds were sold. These assets encompassed investments in cryptocurrencies, tech companies, venture funds, and real estate. 

    Following the sale of shares in AI startup Anthropic, where FTX had previously invested $500 million, the distressed exchange found $6.4 billion in cash. It is important to note that the amount also includes assets controlled by debtors and liquidators.

    However, the distribution has faced dissatisfaction among some clients due to settling customer claims based on lower cryptocurrency prices from November 2022, when FTX filed for bankruptcy. 

    For instance, clients holding 10 Ethereum’s native token ETH in their accounts will receive approximately $12,000 in cash, significantly lower than the asset’s current worth of around $29,000 as ETH trades at $2,900. 

    Despite objections, the court has approved creditor voting on the liquidation plan, and if passed by the necessary number of votes, the plan will be implemented after final court approval.

    Buying Frenzy For Bitcoin, Ethereum, And Solana?

    Key dates to watch for further developments include August 16, 2024, which marks the deadline for FTX customers to vote on the bankruptcy wind-down payments, and October 7, 2024, when Judge John Dorsey will consider approving the FTX bankruptcy plan.

    If the current plan is approved, clients can expect payouts to begin by the end of Q3, potentially providing much-needed liquidity for token purchases. This timing coincides with the US elections, which could contribute to increased market volatility. 

    Consequently, FTX payouts could serve as an additional factor fueling a bullish trend in the crypto market as it finds itself in significant price declines.

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    Bitcoin has fallen over 21% in the past month at one end of the market, from a high of $71,000 to a current trading price of $56,400. Meanwhile, Solana surpasses BTC’s losses with a 22% drop in the same time frame, currently trading at $134.

    The 1-D chart shows that BTC’s price is trending downward. Source: BTCUSD on TradingView.com

    Furthermore, it is expected that the ongoing selling pressure from the US and German governments witnessed over the past month could continue for the rest of the year, and the cash injection from FTX to crypto investors could help mitigate the expected selling pressure.

    The researcher points out that since most affected FTX customers are retail crypto investors, a significant portion of the money is expected to flow back into cryptocurrencies. Bitcoin, Ethereum, and Solana are likely to receive the most liquidity. 

    Featured image from DALL-E, chart from TradingView.com

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    Ronaldo Marquez

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  • FTX And IRS Lock Horns Over $24 Billion Tax Bill, FTT's Key Support Wavers

    FTX And IRS Lock Horns Over $24 Billion Tax Bill, FTT's Key Support Wavers

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    In a striking turn of events, the Internal Revenue Service (IRS) in the United States has presented a staggering tax bill of $24 billion against the bankrupt cryptocurrency exchange FTX. 

    FTX Challenges IRS’s $24 Billion Tax Bill

    According to court filings and FTX’s response to the IRS’s claims, several key arguments challenge the basis of the tax bill. Firstly, FTX highlights that its operations spanned three years, never distributing dividends or earnings. 

    Secondly, the exchange’s defense attorneys claim that the company incurred substantial losses rather than generating income that could support the IRS’s “exorbitant” tax claim. 

    Thirdly, the lawyers argue that FTX is currently in liquidation and is not engaged in any ongoing business activities apart from those required for the liquidation process. 

    Finally, the company emphasizes that the recovery sought by the IRS would ultimately come at the expense of FTX’s victims, as the funds would be redirected away from their rightful recipients. 

    As the court hearing approaches, FTX asserts that proceeding with a court-supervised estimation process would demonstrate the company’s significant losses during its operational period, rendering the IRS’s claim “baseless.” 

    FTX emphasizes that any forced payment would harm the victims of the FTX fraud, many of whom are already grappling with “profound losses.”

    FTX’s administrators have managed to recover approximately $7 billion in assets, including $3.4 billion in cryptocurrencies. These figures underscore the complex financial landscape surrounding the IRS’s claim against FTX.

    As the courtroom showdown ensues, the case outcome will undoubtedly have significant implications for the future of crypto taxation and the recovery prospects of FTX’s creditors. 

    FTT’s Bullish Trend Holds Strong

    As the cryptocurrency market experiences a significant correction following a bullish surge led by Bitcoin (BTC), FTX’s native token, FTT, has seen a decline of over 5% in the past 24 hours, adding to the company’s legal concerns.

    After a three-month accumulation phase that kept FTT trading in a range between $0.9 and $1.2 from September to the beginning of November, the token witnessed an impressive surge in the last month, reaching its highest price of the year at $6.042, a level not seen since November 2022.

    FTT’s loss of support at $5.1 on the daily chart. Source: FTTUSDT on TradingView.com

    However, the token has retraced to its current price mark of $4.8, with the next support level at $4.45 in case of further downward movement.

    On a positive note, FTT is trading above key moving averages, including the 200-day and 50-day MA, which provide support and indicate the potential for further upward price action.

    Furthermore, since the beginning of November, FTT has consistently recorded higher highs and higher lows, forming an uptrend pattern. This trend has been observed three times, with the token experiencing an uptrend, followed by a pullback for a support test, and then a continuation to reach new highs.

    Assuming this trend continues and the legal developments do not have a significant impact on the price of the token, FTT may be poised for a significant rise in the coming months, given the remarkable uptrend pattern seen on the daily chart.

    Featured image from Shutterstock, chart from TradingView.com 

    Disclaimer: The article is provided for educational purposes only. It does not represent the opinions of NewsBTC on whether to buy, sell or hold any investments and naturally investing carries risks. You are advised to conduct your own research before making any investment decisions. Use information provided on this website entirely at your own risk.

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    Ronaldo Marquez

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  • US authorities asking FTX investors for information on firm, Sam Bankman-Fried

    US authorities asking FTX investors for information on firm, Sam Bankman-Fried

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    US authorities are asking crypto investors and trading firms who worked closely with FTX to hand over information on the company and its key figures including Sam Bankman-Fried and Caroline Ellison, Bloomberg News reported on Thursday.

    The US Attorney’s Office for the Southern District of New York recently sent out a series of requests, asking recipients to hand over information on a list of FTX employees and associates, the report said, citing people familiar with the case.

    Attorneys from the US Securities and Exchange Commission’s enforcement division also sent similar requests for information to companies that invested in or traded on FTX, the report added.

    The regulator is trying to get a better sense of what FTX representatives told investors and whether any misrepresentations were made that would violate securities laws, according to the report.

    The US Department of Justice’s bankruptcy watchdog earlier on Thursday called for an independent investigation into the collapse of crypto exchange FTX.

    FTX’s downfall will be examined in several more congressional hearings this month, with the House Financial Services Committee set to hold the first in a series of meetings on Dec. 13.

    Last month, newly-appointed FTX CEO John Ray had said in a US court filing that there was flawed regulatory oversight and a lack of corporate control of the bankrupt crypto exchange founded by Sam Bankman-Fried.

    US Attorney’s Office for SDNY, SEC, FTX, and Caroline Ellison did not immediately respond to Reuters requests for comment. Bankman-Fried could not be immediately reached.

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