Billions in FTX creditor payouts are finally set to hit the market, and the crypto world is bracing for impact. 🚨 This massive return of funds could create serious volatility for Bitcoin, Ethereum, and altcoins, as creditors decide whether to hold, reinvest, or cash out. With FTX’s collapse being one of the darkest chapters in crypto history, these repayments are more than just money — they’re a test of market psychology and investor sentiment.
In this video, we break down what these FTX creditor repayments mean for the crypto market, DeFi protocols, and liquidity flows. Could this lead to a supply shock if creditors hold their coins, or will it create a sell-off event that drags prices lower? We’ll also compare it to previous market events, including Mt. Gox distributions, and highlight which assets could be most affected.
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In this video, we break down what these FTX creditor repayments mean for the crypto market, DeFi protocols, and liquidity flows. Could this lead to a supply shock if creditors hold their coins, or will it create a sell-off event that drags prices lower? We’ll also compare it to previous market events, including Mt. Gox distributions, and highlight which assets could be most affected.
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Sofi Investing – Free $25 in stock ➝ https://www.sofi.com/invite/invest?gcp=ab31edd8-701e-4109-9225-51b41e35d246&isAliasGcp=false
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#FTX #CryptoNews #Bitcoin #Ethereum #Altcoins #CryptoMarket #DeFi #Blockchain #CryptoCrash #CryptoInvesting #Web3 #CryptoTrading #CryptoVolatility #CryptoAdoption #CryptoAnalysis
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LearningTranscript
00:00You know, even now, almost two years later, the sheer scale of the FTX collapse, it's
00:11just staggering to think about.
00:12It really is.
00:13Tens of billions gone, millions affected worldwide.
00:16And that confidence crash back in 2022, oof, it basically redrew the map for risk in digital
00:23assets.
00:24Completely.
00:25A total reset moment for the industry.
00:26But OK, after all this time, all the legal wrangling, we finally have something concrete,
00:31a number that's starting to change the story.
00:33A very significant number.
00:35That number is one point six billion dollars.
00:37FTX is set to distribute another one point six billion dollars to its creditors.
00:42This is the third round of repayments.
00:44And it pushes that total recovered amount much closer to what, the six or seven billion dollar
00:49range?
00:50Exactly.
00:51Which is, well, it's huge.
00:52This isn't just some legal notice.
00:53It's potentially a massive liquidity event.
00:56Maybe more than that.
00:57Psychologically.
00:58That's what we need to dig into today.
01:00What does this payout really mean?
01:01Is it going to move the market?
01:02Is it a regulatory milestone?
01:04Or is it more about, you know, finally starting to heal from the whole FTX trauma?
01:08Yeah.
01:09All of the above, potentially.
01:10Yeah.
01:11OK, before we really unpack all of that, just a quick note.
01:14If you find these deep dives useful for getting up to speed quickly on complex topics
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01:34Yeah.
01:35Yeah.
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01:37Absolutely.
01:38OK, so let's unpack this.
01:39This third payout, $1.6 billion.
01:42It feels like the most significant one yet.
01:44It definitely is.
01:45And if we connect this to the bigger picture, look, the size and the timing are just critical
01:52here.
01:53Right.
01:54We always have to remember, even if they get to $7 billion, that's still way short of the
01:57total losses, especially if you adjust for inflation or opportunity costs.
02:01Painful reminder.
02:02Yeah.
02:03But the fact that the debtors are actually doing this, executing a third round, it shows
02:08things are working.
02:09There's operational competence, legal progress.
02:11It's not just numbers on a page.
02:13Exactly.
02:14It's building a framework for how you handle these massive centralized finance failures
02:19in this decentralized world.
02:21It's setting precedents, mandatory ones.
02:24For handling assets, valuing them, distributing them across borders.
02:28All of that.
02:29And honestly, that long term stuff, that probably matters more for the health of Web3 than whether
02:35Bitcoin dips 2% next week because of this payout.
02:37OK, let's get into the nitty gritty of the specific payout then.
02:40So FTX announces another $1.6 billion distribution.
02:45Add that to the first two rounds, which were smaller.
02:47Right.
02:48Yeah.
02:49Much smaller compared.
02:50Now the recovery team has managed to actually mobilize, well, a pretty big chunk of the
02:54recovered assets.
02:55We're talking multi-billions now.
02:56Which is impressive considering the complexity.
02:58Well, that's what's interesting about this $1.6 billion, isn't it?
03:01It shows they've actually overcome some serious hurdles.
03:04Oh, absolutely.
03:05Think about it.
03:06Yeah.
03:07Like, first they had to liquidate all those non-crypto assets FTX held.
03:09Investments, property, equity states.
03:11The whole portfolio stuff.
03:12Yeah.
03:13Scattered everywhere.
03:14And then they had to fight off legal challenges, objections from different creditor groups in
03:18different countries.
03:19It's a legal minefield.
03:20Seriously.
03:21The lawyers basically had to untangle this, like, impossibly complex financial knot just to
03:26free up this cash.
03:27So for the average creditor, seeing this money actually move, it's maybe the first real proof
03:34that the system set up to protect them is actually working.
03:37That validation must be huge.
03:38And this is where we get into some nuance that, honestly, a lot of people miss.
03:42The legal and financial side gets tricky.
03:45Oh, so.
03:46Remember when FTX collapsed in November 2022?
03:51Crypto prices were, well, they were in the basement.
03:54Right.
03:55The market was cratering.
03:56The assets held by FTX, the Bitcoin, Solana, Ether, all that were valued at those low prices.
04:01But since then, many have gone way, way up.
04:04Ah, okay.
04:05I see where this is going.
04:06It creates this, you could call it a cruel irony for the creditors.
04:10Because they're getting paid back based on the low value, not the current higher value.
04:14Pretty much.
04:15There's been a huge legal debate about this.
04:18Are creditors owed the dollar value from back then?
04:21Or should they get the actual tokens, which are now worth much more?
04:25Hmm.
04:26And this distribution kind of implicitly answers that.
04:28The restructuring team is mostly focused on selling assets to cover claims based on that
04:34November 2022 fiat value.
04:36But they benefited from the price increases when they sold.
04:39Exactly.
04:40They likely sold assets at much higher prices recently, which generated more cash and helped push this distribution total up so high, so relatively quickly.
04:48So it's good for the total payout number, but maybe frustrating for creditors who feel they missed the upside on their specific coins.
04:55Precisely.
04:56It's controversial for some, no doubt.
04:57Yeah.
04:58But it validates the strategy of liquidating strategically.
05:00Instead of just holding everything, that's what made this $1.6 billion possible now.
05:05Which takes us right back to the psychology of it all.
05:07You really can't overstate how devastating FTX was emotionally.
05:11People lost everything.
05:12Life savings, retirement plans.
05:14Yeah.
05:15Gone.
05:16And the trust shattered.
05:17Yeah.
05:18Especially trust in these big centralized platforms.
05:20So every payout, especially a big one like this, it chips away at that feeling of total loss and helplessness.
05:27It shows some accountability.
05:28Some accountability, yeah.
05:29And maybe even some regulatory competence, surprisingly.
05:33Bankruptcy settlements, especially in new areas like crypto, are usually incredibly slow, super painful, and you often get pennies on the dollar.
05:42The fact that this is the third distribution, and it seems to be recovering a decent percentage of the claims, again, based on those 2022 values, that helps repair some of the damage.
05:53It tells people there's a process, even for disasters.
05:56Right.
05:57It shows the ecosystem that even the absolute worst case scenario has some kind of orderly resolution mechanism.
06:03And that's critical if you ever want to attract serious new capital again.
06:07Okay.
06:08So that perfectly sets up the big market question, the thing everyone's speculating about right now.
06:12What happens next with the money?
06:13Exactly.
06:14What do the thousands of creditors actually do when this $1.6 billion hits their accounts?
06:19Yeah.
06:20Because that choice, that's the pivot point for the immediate market impact.
06:23It feels like a real fork in the road.
06:25Totally.
06:26On one hand, you've got people who've been burned badly, waited two years, they might just take the money and run, right?
06:32Cash out to fiat dollars, euros, whatever, pay off debts, get some stability back, maybe just get out of crypto altogether.
06:39And that means sell pressure, potentially significant sell pressure.
06:43But on the other hand, maybe some see this as found money, like house money, a second chance.
06:51Right.
06:52Maybe they immediately plow it back into Bitcoin or ETH or maybe some altcoins they think have potential now.
06:57So sell off reinvestment.
06:59Their actions are going to dictate where the market goes in the short term.
07:03It's a huge question mark.
07:04And that tension you just described, it feeds directly into those short term market dynamics.
07:09We can try to model it thinking about who these creditors are.
07:12Different groups will react differently?
07:13You'd think so.
07:14If a big chunk of this $1.6 billion gets liquidated fast, turned into fiat.
07:20Yeah.
07:21Yeah, we could see a noticeable drag on prices.
07:23Maybe temporary, but noticeable.
07:25Who's most likely to sell, do you think?
07:27Well, you have to consider the different risk appetites.
07:30Retail creditors, right?
07:31Yeah.
07:32Smaller holders.
07:33They might have needed that money urgently two years ago.
07:35Their risk tolerance might be zero now.
07:37So they're probably first in line to cash out.
07:40It seems likely.
07:41Then you have institutional creditors.
07:43Maybe hedge funds, other crypto firms.
07:45They might have already hedged their exposure or written off a big part of the loss.
07:49So they might be less desperate to sell.
07:51They might be more strategic.
07:52Maybe sell portions slowly.
07:54Maybe even reinvest some of it into a diversified crypto portfolio.
07:58It depends on their own strategies.
07:59But even a fraction of $1.6 billion is a lot of money hitting the sell side.
08:04Oh, yeah.
08:05Let's just say, hypothetically, 30% of it gets sold within like two weeks.
08:09That's almost half a billion dollars.
08:11Wow.
08:12That's enough selling pressure to definitely dampen market enthusiasm.
08:15Or maybe make a small pullback worse.
08:17It's not insignificant.
08:19So, okay, how do we actually see this happening?
08:21We can't just guess based on sentiment, right?
08:23We need data.
08:24We need data.
08:25Exactly.
08:26This is where the technical tools, the on-chain analysis, become absolutely vital.
08:30Watching the blockchain flows.
08:31Precisely.
08:32But it needs to be sophisticated, real-time analysis.
08:36Focus specifically on wallets linked to the FTX recovery process once the money starts moving.
08:41What kind of signals are you looking for?
08:43Well, first, you track large movements like big UTXOs leaving known recovery wallets.
08:49Okay.
08:50Second, and crucially, where do those funds go?
08:53Are they heading straight to deposit addresses on major exchanges like Binance or Coinbase?
08:58Because that signals an intent to sell.
09:00Almost certainly.
09:01Yeah.
09:02Maybe the most definitive sign is tracking volume spikes on stablecoin pairs.
09:07Like, are people immediately converting whatever they receive into USDC or USDT?
09:13Confirming they're exiting to something pegged to fiat.
09:16Exactly.
09:17That kind of granular data will give us a much clearer picture of whether this money is flowing back into the market or being pulled out entirely.
09:23Okay, so that's the short-term risk, the sell pressure fear.
09:26But we've got to balance that, right?
09:28There's the other side, the long-term optimism argument.
09:31Particularly from institutions.
09:32Yeah, the simple fact that this resolution is actually happening, that billions are being recovered and distributed, that sends a really powerful, bullish signal, doesn't it?
09:41Especially to those big institutional players who've been sitting on the sidelines since 2022.
09:46It absolutely does.
09:47Because traditional finance, the big asset managers, pension funds, you name it, they need clarity.
09:55They need rules.
09:56And crucially, they need to know what happens if things go wrong.
09:59They need a playbook for failure.
10:00Exactly.
10:01Seeing actual, tangible progress in a bankruptcy this massive, it signals that the crypto asset class is maturing.
10:08It tells those institutions, okay, the risk of a total unrecoverable blowup is being managed now through legal and regulatory frameworks.
10:17That's a huge deal for them.
10:18That's a huge deal for them.
10:19And that structural maturity, that growing clarity, couldn't that attract new institutional money?
10:23Money that's potentially much larger and more stable than the immediate sell volume from the FTX creditors.
10:29That's the core argument, yes.
10:31The influx of new long-term institutional capital could, over time, easily dwarf the short-term liquidation pressure from this specific payout.
10:40So one is settling old debts, the other is inviting new investment.
10:45That's a great way to put it.
10:46The short-term pressure is about relief from past trauma.
10:49The long-term confidence is about building the future infrastructure.
10:53Institutions aren't just looking at the price today, they're looking at the legal rulebook.
10:58And this resolution process is writing that rulebook.
11:01It really is.
11:02It provides a clear pathway, a legal mechanism for dealing with failed centralized companies in this space that fundamentally lowers counterparty risk for institutions.
11:11That's a massive step towards making crypto a truly tradable asset class for the big players.
11:17Which brings us back to the psychology again.
11:19You called it healing from the FTX trauma.
11:21Yeah, I think that's fair.
11:23The collapse wasn't just financial, it was a deep betrayal of trust.
11:26Trust in key people, trust in the platforms, meant to be the gateways.
11:30It really shook the belief that the space was growing up, becoming safer.
11:34It felt like a huge step backwards.
11:36Definitely.
11:37So when creditors, many of whom probably thought that money was gone forever, actually get a significant chunk back, it reduces that pervasive market anxiety.
11:46Less fear in the system.
11:47Exactly.
11:48And less fear generally means less panic selling when the market inevitably dips.
11:52It means more willingness from the long term believers, the builders, to keep committing their capital and their time.
11:58So when we ask what does this all mean, it's partly about restoring emotional capital.
12:03I'd argue it's just as critical as the financial capital.
12:05Yeah.
12:06Clearing out that psychological overhang, that legacy debt, it encourages a longer term view, more commitment to innovation in Web3.
12:14It's a healthier foundation.
12:16Okay.
12:17Moving from the sort of emotional and market cleanup to the actual structural changes happening.
12:22Mm-hmm.
12:23This bankruptcy, this whole resolution process, it's setting massive precedence, isn't it?
12:28Like legally foundational stuff.
12:30Unprecedented is the right word.
12:31We've just never seen anything quite like it.
12:33A global exchange this big, dealing with these kinds of volatile digital assets, collapsing under such intense international scrutiny.
12:40Yeah, the scale is mind boggling.
12:42So the whole process itself, tracking assets across blockchains, trying to value tokens that swing wildly, figuring out who gets paid first among different creditor groups.
12:52Retail customers versus institutional lenders.
12:55Right.
12:56And coordinating claims across different legal entities, FTX US, FTX International.
13:01It's incredibly complex.
13:02It is.
13:03But that whole messy process is basically creating the regulatory roadmap for the future, isn't it?
13:09Absolutely.
13:10It sets the precedent for how regulators everywhere are likely to handle CEX failures going forward.
13:16The lessons learned here about commingling funds, terrible governance, how user assets are treated, they're already being baked into new laws, right?
13:23In the US, Europe, Asia.
13:25They are.
13:26This case provides the concrete evidence, the why behind stricter regulations that are being drafted right now.
13:31What are the key legal points being clarified here?
13:34Well, a few big ones.
13:35First, this question of asset classification.
13:38When you deposit crypto on an exchange, is it still your property or does it become a claim you have against the company like an unsecured debt?
13:45That's a huge difference in bankruptcy.
13:47It's massive.
13:48It's massive.
13:49The FTX case, mostly under US Chapter 11, seems to be leaning towards treating them as claims, meaning customers get in line with other creditors, though there have been fights about that.
13:58Okay.
13:59What else?
14:00Second, valuation and volatility.
14:02How do you put a price on these assets for bankruptcy purposes when they fluctuate so much?
14:07Yeah.
14:08Good question.
14:09The FTX and the recovery team basically had to pick a date, the bankruptcy filing date, and use the prices from that day as the anchor point.
14:18It's imperfect, obviously, given the later price run-ups we talked about.
14:21But it sets a standard.
14:22It provides a standard, yeah.
14:23A legally defensible one for future cases.
14:26These are the kinds of granular details that are building out that legal playbook.
14:30And this all circles back to the big ecosystem lesson, right?
14:33The huge takeaway from FTX is failure.
14:36Centralized trust is dangerous.
14:38It couldn't have been highlighted more dramatically.
14:40That whole fiasco just screamed the risks of letting a CEX hold your funds.
14:45The old crypto saying, not your keys, not your coins.
14:48FTX became the ultimate terrifying object lesson for ignoring that.
14:52The problem wasn't the crypto itself.
14:54It was the middleman.
14:55The centralized point of failure.
14:57Exactly.
14:58When a CEX holds the keys, their internal mess, the opacity, the bad decisions, the outright fraud like commingling customer money with Alameda's trading funds, that becomes your catastrophic risk.
15:11And meanwhile, DeFi protocols.
15:13Well, DeFi largely weathered the storm.
15:15Structurally, at least.
15:17The smart contracts kept running.
15:18The public ledgers stayed public.
15:20Market confidence took a hit everywhere, of course.
15:22But the protocols themselves didn't break because of FTX's internal fraud.
15:26Right.
15:27It was a stark contrast.
15:28It really hammered home the argument for transparency for rules enforced by code rather than trusting a black box run by humans.
15:35So the core lesson is that centralization introduces this massive single point of failure.
15:40Which is kind of the opposite of what crypto was supposed to be about, right?
15:43The FTX court filings showed it plain as day.
15:46It was basic, old school fraud, moving money where it shouldn't go.
15:50And that was only possible because of that opaque custodial structure.
15:54So the market had to learn that lesson the hard way.
15:56Out of sheer necessity.
15:57And that led directly to this push for proof of reserves and much greater transparency from the exchanges that survived.
16:04It became non-negotiable.
16:06Before FTX, proof of reserves was kind of niche.
16:09Maybe a marketing gimmick.
16:10Often not done very well.
16:11Yeah, I remember.
16:12Post-FTX.
16:13It became table stakes.
16:15Customers demanded it.
16:16Survival depended on it.
16:18Exchanges had to scramble to implement things like Merkle trees so users could actually verify their funds were included.
16:25And getting third party audits, even if those audits aren't perfect.
16:28Exactly.
16:29We have to be clear.
16:30Proof of reserves isn't a magic bullet.
16:31It usually just shows assets at one point in time.
16:34It doesn't always show liabilities the other side of the equation.
16:37Right.
16:38It's not the full picture.
16:39But the trend towards regular verifiable reserve proofs is a direct measurable result of FTX.
16:46It forced the industry's hand towards transparency.
16:49And regulators are watching this closely now.
16:51Oh, you bet they are.
16:52They now have FTX as the ultimate case study showing exactly how centralized control can fail spectacularly.
16:59The pressure to mandate strict rules, legally enforced segregation of customer funds, real transparency, it's immense.
17:06And this FTX resolution gives them the ammo.
17:09It provides the legal justification, the real world proof needed to push those changes through globally.
17:15So, yeah, it's a painful recovery process.
17:17It's directly fueling the regulatory evolution that's going to define CEXs for the next decade.
17:23Okay, to really get a handle on what this $1.6 billion payout might mean for the market, that whole sell pressure versus long-term maturity debate, we need to look at history, right?
17:32Parallels are always helpful, yeah.
17:33And the big one, the ghost that always hangs over crypto, is Mint Gox.
17:37The original disaster.
17:38Exactly.
17:39Their payouts, distributing hundreds of thousands of Bitcoin from the 2014 collapse, they're finally supposed to happen in 2024, 2025.
17:46After a decade.
17:47Right.
17:48So that's become the go-to historical comparison.
17:51People are watching Gox distributions very closely, thinking it might predict how FTX payouts impact the Bitcoin price.
17:57The theory being that Gox creditors, who are getting Bitcoin that's worth astronomically more than in 2014, will just dump it on the market.
18:05Creates huge sell pressure, yeah.
18:07That's the worry.
18:08And the Gox parallel is useful, especially psychologically.
18:11But we need to be careful about the differences, too.
18:14How so?
18:15Well, Gox was handled under a Japanese process called civil rehabilitation.
18:19Mm-hmm.
18:20It's a bit different from FTX's Chapter 11 bankruptcy in the US.
18:23It's maybe more focused on restoring value to claimants.
18:27Okay.
18:28And crucially, Gox creditors are mostly getting paid back in Bitcoin, whereas FTX creditors are getting the fiat value based on those asset liquidations we talked about.
18:38Ah, that's a key difference.
18:40It really is.
18:41The Gox sell pressure argument is all about those creditors sitting on potentially life-changing profits from Bitcoin bought dirt cheap years ago.
18:49The urge to cash out those massive gains is probably intense.
18:53Makes sense.
18:54For FTX creditors, it's a bit different.
18:56They're getting back a percentage of what they lost based on prices from the 2022 bottom.
19:00It's relief, for sure.
19:02Mm-hmm.
19:03But the driver to sell is more about cutting losses, getting liquid, maybe fear.
19:08Not the same kind of massive profit-taking incentive as Gox.
19:12So, similar situation, different motivations driving the potential selling.
19:16Potentially, yeah.
19:17It's more nuanced.
19:18Okay.
19:19Beyond Gox, were there other collapses around the same time as FTX that give us clues, that contagion era?
19:24Oh, yeah.
19:25Several relevant ones.
19:26Yeah.
19:27Let's start with Celsius Network.
19:28The big crypto lender.
19:29Right.
19:30Their failure was huge.
19:31And the decisions about how to distribute their assets directly impacted specific token markets.
19:36Remember their CEL token, because Celsius held so many different types of crypto.
19:40The legal choice is like, do we give creditors back the exact tokens they deposited in kind, or do we sell everything and give them cash?
19:48Those choices had major ripple effects, especially for smaller, less liquid coins.
19:53What's the lesson there for FTX?
19:55It showed how careful you have to be when liquidating large distressed crypto portfolios.
20:01Celsius often used over-the-counter, OTC deals, selling big blocks privately instead of dumping on exchanges to avoid crashing prices.
20:10Trying to maximize recovery.
20:11Exactly.
20:12For FTX, especially with their big Solana stash, for example, the lesson was sell methodically, strategically, don't trigger a panic.
20:20It showed a bit of growing maturity in how the industry handles these liquidations.
20:24Okay.
20:25Who else?
20:26Then there's BlockFi, another lender.
20:28Their bankruptcy gives us specific lessons about unwinding under regulatory heat, and especially about the priority of claims.
20:34Who gets paid first.
20:35Yeah.
20:36They had complex fights over whether retail customer deposits should come before, say, big institutional loans made to BlockFi.
20:43Settling that hierarchy is another key piece of the legal playbook for crypto failures.
20:47Got it.
20:48And we can't forget 3AC, right?
20:49Three arrows capital.
20:50Got to mention 3AC.
20:51Not so much for their recovery process, which is its own nightmare.
20:55Right.
20:56But as the ultimate reminder of how insanely interconnected everything was back then.
21:00The domino effect.
21:01Totally.
21:023AC blew up.
21:03And that immediately hit lenders like BlockFi and Celsius.
21:06And it involved leverage connected back to Alameda and FTX.
21:10It was a tangled mess.
21:11So why is that relevant now?
21:13It underscores why getting this FTX money back out there is so important.
21:17FTX was arguably the biggest hole in that whole web of debt.
21:21Successfully recovering and distributing these billions is crucial for finally, financially and psychologically clearing the wreckage of 2022.
21:30Closing that chapter.
21:31Hopefully.
21:32Or at least a major part of it.
21:33OK, so looking forward then.
21:34What are the big unknowns still swirling around FTX?
21:37Well, the first obvious one is the timeline.
21:39We've got this $1.6 billion now.
21:43But how many more payouts will there be?
21:45And when will this actually be over?
21:46When is the recovery considered full?
21:48Still years away, probably.
21:49Likely.
21:50This $1.6 billion is great.
21:52But the legal gears grind slow.
21:54The recovery team is still chasing assets, suing third parties.
21:57The final percentage recovered really depends on how successful those ongoing efforts are.
22:02So this is a milestone, not the finish line.
22:04Definitely not the finish line.
22:05The saga continues.
22:06And then there's the really provocative question.
22:08FTX 2.0.
22:09Is that still a thing?
22:11Could the exchange actually restart?
22:13There have been whispers, even some official talk about exploring it.
22:17Really?
22:18Could it actually happen?
22:19Is the brand just too toxic now?
22:21That's the billion dollar question, isn't it?
22:23And I think the question for you listening is probably, would you ever trust a relaunched FTX?
22:30Tough sell.
22:31Extremely tough.
22:32Yeah.
22:33Given the trauma, the Sandbagman-Freed Association, the global stain, the consensus seems to be, yeah, it's probably permanently toxic.
22:40Even if the tech was good.
22:41Even then, any FTX 2.0 would face this enormous trust deficit.
22:45The market seems to have moved on, demanding decentralized options or, at minimum, exchanges with rock-solid proof of reserves and transparency.
22:53Yeah.
22:54Feels like that ship has sailed.
22:55Okay.
22:56One last area before we wrap up.
22:57Something less discussed but really interesting.
22:59The market for trading FTX claims.
23:02Oh, yes.
23:03The secondary market.
23:04Fascinating stuff.
23:05What exactly is that?
23:06It's basically, well, it's a market where people trade the right to receive future FTX payouts.
23:10So creditors can sell their claim before they actually get the money.
23:13Exactly.
23:14Think about it.
23:15Maybe you're a retail creditor.
23:16You need cash now.
23:17You don't want to wait potentially years for the final payout.
23:20You can sell your claim today.
23:22To who?
23:23Usually to specialized investment funds, distressed debt investors.
23:27They buy the claim from you at a discount.
23:30Say you have a $100 claim.
23:32They might pay you $70 or $75 for it today.
23:35Why would they do that?
23:36They're betting that the final payout from FTX will eventually be more than the 70 or 75 cents on the dollar they paid you.
23:44If the final recovery is, say, 90 cents, they make a tidy profit.
23:50It's an investment based on their analysis of the recovery process.
23:53So it's like monetizing hope and uncertainty.
23:56That's a perfect way to put it.
23:57Monetizing hope, uncertainty, and the need for liquidity.
24:00And this market actually tells us something.
24:01Oh, absolutely.
24:02It serves two key functions.
24:04One, it gives immediate cash, albeit at a discount, to creditors who need it.
24:09But two, and maybe more importantly for analysis, tracking the price of these claims, the discount rate gives us a real-time, objective measure of market confidence in the final recovery.
24:20How so?
24:21If claims are trading close to face value, like 90 cents on the dollar, it means the market is pretty confident the recovery will be high and maybe relatively soon.
24:29If the price drops to, say, 60 cents, it signals serious doubt about the final amount or the timeline.
24:36So where are they trading now, roughly?
24:38The current range, from what I've seen, suggests decent confidence, but definitely not absolute certainty.
24:44There's still a discount being priced in, reflecting the remaining risks and the time value of money.
24:49This market is a living reflection of how much uncertainty still surrounds the FTX legacy.
24:54Okay, let's try and bring this all together.
24:55This $1.6 billion payout.
24:57It's clearly a huge moment in the crypto story.
25:00We've kind of identified three main threads here.
25:03First, just the concrete progress.
25:05Money is actually moving back to creditors.
25:07That total recovered is climbing towards that six, maybe $7 billion mark.
25:12That's real financial relief.
25:13Undeniable progress, yeah.
25:14Second, though, it creates this real tension in the market.
25:18You've got the potential short-term sell-off from people cashing out.
25:22The fear factor.
25:23Versus the long-term optimism, especially from institutions who see this orderly resolution as a sign of maturity.
25:30The confidence factor.
25:31And here's where it gets really interesting.
25:33Third, this whole painful process.
25:36It's actively forging the rules for the future.
25:39Setting legal precedents for CEX failures.
25:42Pushing the entire industry towards transparency.
25:45Better custody.
25:46Proof of reserves becoming standard practice.
25:49Exactly.
25:50It's forcing change.
25:51So yeah, the central lesson here for you, the learner, is probably that this journey, as awful and costly as it's been, is fundamentally reshaping Web 3.
26:00How so?
26:01It's demanding transparency.
26:02It's demanding accountability.
26:04It's forcing everyone to manage custody risk properly.
26:07The industry is basically being forced to graduate from an era of just like blind trust to one where you need verifiable proof and legal safeguards.
26:15The market's learning the hard way to price in the real risk of these centralized failures.
26:20Okay.
26:21So let's leave everyone with a final thought to chew on.
26:23All right.
26:24Thinking about those parallels meant Gox where payouts might mean massive profit taking versus FTX and Celsius where it's more about loss recovery.
26:32Is the market impact of these huge creditor repayments always going to be a net negative, just a drag from sell pressure?
26:38Or could it be that clearing out this old debt, demonstrating that there is an orderly way to handle even catastrophic failures, is that actually the most bullish signal we could get for the long term maturation of crypto as a whole asset class?
26:51Is fixing the past the best way to build the future?
26:54That's the question.
26:55Something to definitely think about as we watch how this $1.6 billion and future payouts actually play out in the market.
27:08So, let's take the first quarter.
27:09Yeah, thank you.
27:11I'll be here for a moment again.
27:12I appreciate that.
27:13Give us a littleillo checkout about the course.
27:15I'll be there for me.
27:16I think that.
27:17It's a very small political devotee on today underutos Nightcare personnel.
27:18And in that situation, I'll be able to see how this Americanハ sabia buyer of a living outside of the world has nothing in place for the rising revolution or whatever its decades.
27:22Now that we can do this all we need and take a big deal of monote Saban.
27:23D Uncle32 or Brazil has�存在哪 Here on camera and surfboard.
27:24We'll have thousands of Johnny Westbrook.
27:25And instead we try to прогigen �ード here.
27:27We're still 2021.
27:28And now we have to hit that far out of theusion that no attention, Carmen charming.
27:31кров Right now.
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