FTX Token Drops as Hopes of Exchange Resuming Operations Fade

FTT, the native token of the now-bankrupt crypto exchange FTX is in free fall again. However, the latest slip is not as catastrophic as November last year when the exchange’s ex-CEO Sam Bankman-Fried’s crypto empire collapsed.

FTT almost doubled in value yesterday after FTX’s bankruptcy attorney Andy Dietderich suggested that the exchange could resume operations in the near future.

In response to Judge John Dorsey’s questions concerning the possible reopening of FTX, Dietderich said the exchange did not have a specific path forward but had several options on the table. When asked how FTX plans to raise funds to reopen, the attorney said the company was exploring between seeking resources from external parties and using its remaining funds.

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In addition, Dietderich suggested that FTX would let customers channel back to the exchange a portion of the money they will receive once the refund process begins. According to the attorney, this move is meant to give clients a certain level of control over FTX going forward.

Following Dietderich’s remarks, FTT skyrocketed to $2.64 from $1.29. But the surge was short-lived as the token has fallen by 21% over the last 24 hours and is now priced at $1.99, according to data from CoinGecko.

The latest FTT pump is similar to that witnessed in January when the current CEO of FTX, John J Ray III, disclosed that he had assigned certain individuals in the company to explore the possibility of restarting the FTX’s international exchange. At the time, FTT surged 33% to $2.38.

Crypto Gurus Say FTT Token Won’t Have Any Relation to New FTX

Meanwhile, Managing Partner and Chief Investment Officer of BlockTower Capital, Ari Paul, has claimed in a tweet that the FTT token will never have any connection with FTX again for several reasons. He now considers these tokens mere collectibles. Paul further explained that FTT would be a non-factor in the re-birth of FTX because of potential legal liability.

The Chief Investment Officer made the comments while responding to a tweet by Gabriel Shapiro, the General Counsel of Delphi Labs, that those who believe FTT has a role to play once FTX reopens have brain damage.

The FTT Market Performance

FTT was largely traded on Binance yesterday, accounting for about 67% or $161 million of the token’s total trading, as per CoinGecko. Gate.io came second with $32 million, and XT.com ranked third with $16 million.

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Despite the recent gains, FTT is down 96% from its peak price of $84.19, reached in September 2021. The token fell from $26.14 to $1.54 last November after a report by CoinDesk revealed that FTT accounted for a significant portion of the funds held at FTX’s sister firm Alameda Research.

Binance CEO Changpeng Zhao further fueled FTT’s implosion after disclosing that his exchange would sell off its bag of the token.