First Mover Americas: FTX Proposes Returning Up to 90% of Customer Funds

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Bankrupt crypto exchange FTX floated an amended proposal to return up to 90% of creditor holdings held at the exchange before it went bust last November. The debtors' group will formally file the plan to a U.S. bankruptcy court for perusal by Dec. 16. The proposal states that customers with a preference settlement of less than $250,000 can accept the settlement without any reduction of claim or payment. Preference settlement is 15% of customer withdrawals on the exchange, nine days before it went under. Creditors would further receive a "Shortfall Claim" against the general pool corresponding to the estimated value of assets missing at their exchange – estimated to be nearly $9 billion for FTX.com and $166 million for FTX.US, the exchange’s U.S. arm. However, recoveries could be marred by various factors, such as taxes, government claims, token price fluctuation, etc.

Binance has long been the world's largest cryptocurrency exchange by trading volume. Still, on Monday, traders looking to buy and sell bitcoin BTC$90,113.83 quickly on Binance were at a relative disadvantage to their peers on Kraken and Coinbase (COIN), according to data tracked by Paris-based Kaiko. The 0.1% ask depth on Binance, a measure of buy-side liquidity, crashed to just 1.2 BTC ($30,000) from 100 BTC as volatility exploded after an erroneous report that BlackRock's (BLK) spot exchange-traded fund (ETF) had been approved circulated on social media. The leading cryptocurrency popped 7.5% to $30,000 in a knee-jerk reaction to the rumor, only to give up gains after BlackRock denied the report.

California Gov. Gavin Newsom signed a crypto licensing bill on Friday to take effect in July 2025. Considered California's answer to New York's "BitLicense," the Digital Financial Assets Law faced heavy industry criticism, but was passed by the state's Assembly in September 2022. The law requires California's Department of Financial Protection and Innovation (DFPI) to create a regulatory framework for crypto. The framework includes a licensing regime and gives the department enforcement and rulemaking authority over the sector. The DFPI also gets an 18-month implementation period to ensure "the adopted regulatory framework can be thoughtfully tailored to address industry trends and mitigate consumer harm," the letter said.

Chart of The Day

• The chart shows the 24-hour change in trading volume in bitcoin options at strikes ranging from $10,000 to $120,000.
• The call option at the $30,000 strike has seen the highest trading volume in the past 24 hours as traders scrambled to take a bullish exposure amid the spot ETF approval rumor.
• Source: Amberdata

- Omkar Godbole

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