The native token of the cryptocurrency exchange FTX, known as FTT, experienced a remarkable surge of almost 90% within a 24-hour period. This surge propelled the token to reach a nine-month high of $2.33. The catalyst for this surge was the suggestion made by the Securities and Exchange Commission (SEC) Chair, Gary Gensler, regarding the potential revival of the insolvent exchange under new and proper leadership. Gensler specifically advised any potential buyers of the failed crypto firm to prioritize operating within the boundaries of the law, emphasizing the importance of building trust with investors and ensuring transparency.
Gensler’s remarks shed light on the significance of integrity and trustworthiness for any potential acquisition of FTX. He cautioned against commingling various functions, such as trading against customers or utilizing their crypto assets for personal gain. These warnings come in the aftermath of allegations of mishandled customer funds under the previous leadership of Sam Bankman-Fried, who now faces serious legal repercussions.
Reports indicate that the bankruptcy process of FTX is nearing its conclusion, with three prospective buyers in the running: Bullish, led by former NYSE president Tom Farley; Proof Group, a cryptocurrency venture capital firm; and Figure Technologies, a fintech startup. Once a successful buyer is determined, they may oversee the reactivation of FTX’s operations following the company’s expected exit from bankruptcy in 2024. However, any potential acquisition will be subject to stringent scrutiny by the SEC, given the preceding allegations of misconduct.
Gensler’s comments have had a notably positive effect on FTT’s market performance. The token experienced a staggering 90% spike, reaching a value of $2.26969 at the time of reporting. This rally translated into an increase of over $300 million in FTT’s market capitalization, demonstrating renewed investor interest in the struggling token. Additionally, trading volume for FTT surged by 940% during the reporting period, amounting to $230 million.
It is worth noting that this is not the first time news of a potential restart has influenced FTT’s price. Earlier in the year, the token witnessed a 12% increase in value when court filings surfaced, revealing FTX CEO John J. Ray III’s consideration of a restart plan for the failed exchange. These instances highlight the market’s responsiveness to positive indications of revival for FTX.
FTT’s substantial surge in value and market capitalization is a direct response to SEC Chair Gary Gensler’s suggestion that FTX could be revived under new leadership. The ongoing bankruptcy process has attracted several prospective buyers, but the acquisition will undoubtedly face intense scrutiny from regulatory bodies. Nevertheless, this recent turn of events has reinvigorated investor confidence in FTT’s potential future prospects.
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