Hackers siphoned off more than USD 473 million from FTX accounts after it officially filed for bankruptcy protection. Since FTT only aimed to incentivize investors to prefer the now-defunct exchange, no one knows whether its price will rise again.
FTT recently crashed when the now-defunct cryptocurrency exchange FTX descended into chaos. Its price fell to a low of USD 1.36, about 95% below the high in November.
Since the total market capitalization of FTT dipped to USD 469 million, many fear its exchange rate will hit zero.
The Collapse of FTX Causes a Crisis in the Crypto Market
Alameda Research, the sister company of FTX, secretly bought unusually high amounts of FTT. That situation raised suspicions among many investors, who proceeded to sell their token holdings. Since FTX clients also emptied their accounts, the cryptocurrency exchange faced liquidity problems.
Finally, Sam Bankman-Fried decided that FTX, its US subsidiary, and Alameda Research should file for bankruptcy protection.
That caused a crisis in the crypto market, as the prices of most cryptocurrencies plummeted. For example, Bitcoin (BTC) fell to USD 15,800, its lowest level in 2 years. Meanwhile, Solana (SOL) and other altcoins closely related to FTX fell further.
The market capitalization of all cryptocurrencies dropped from USD trillion to around USD 833 billion.
After FTX officially filed for bankruptcy protection, more than USD 473 million flowed out of client accounts. Hackers may have been responsible for that attack, from which it was possible to recover some funds.
Regulators in the Bahamas and the United States are also investigating what may have caused the accident. In addition, most analysts believe that Sam Bankman-Fried will face legal charges.
Over the weekend, there was a launch of 200 million FTT tokens, contrary to the usual schedule. Binance and other cryptocurrency exchanges announced that they would not allow FTT deposits, but FTX has remained silent.
Despite Uncertainty about Its Use, FTT Could Rise Again
Many cryptocurrency traders wonder whether the price of FTT may fall to zero after the bankruptcy of FTX. Since that coin only aimed to incentivize investors to prefer the now-defunct exchange, no one knows what its use will be.
The price of FTT might drop to zero as it no longer plays a role. However, there have already been other cases of discrepancy between the value of native tokens of centralized exchanges (CEX) and their financial health.
CEL, the native token of the Celsius Network, rose sharply a few months after the company filed for bankruptcy protection. Similarly, the price of VGX rebounded after Voyager Digital went bankrupt.
Other examples are Terra Luna Classic (LUNC) and TerraClassicUSD (USTC), whose trading volume is comparatively high, as they still seem to have value.
Nobody can rule out that the price of FTT might rise again in the coming months. However, investors should be cautious as such an illiquid currency could be subject to scams and other forms of manipulation.
By Alexander Salazar
