Individual users on the embattled FTX crypto exchange who could not withdraw their funds are now eligible to benefit from the 38 million worth of CHZ tokens. The funds are set aside by Chiliz’s founder.
The crash of the FTX empire has sent chilling waves through the crypto industry. FTX is one of the largest crypto exchanges in the world and the latest to go into bankruptcy.
Accordingly, some key industry players are taking several steps to stabilize the tense situation by injecting resources to reduce the chaos. For example, Alexandre Dreyfus, Chiliz’s founder, announced in a Twitter post on November 13 that he is allocating 38 million CHZ as a bailout to compensate some FTX users.
However, such users must have held CHZ tokens on the troubled platform. As a result, each user is entitled to $10,000 worth of CHZ tokens.
However, the founder disclosed that the compensation plan is subject to legal interpretation and the liquidators’ approval. For instance, it would need a list of affected users, which the network should provide.
The move by Chiliz came on the heels of a similar approach from TRON Labs after its CEO Justin Sun penned an agreement with FTX to support TRX’s recovery. Similarly, the crypto derivatives platform, Bitget has revealed a “builder fund” worth $5 million to help affected traders from the FTX collapse.
FTX Suffers Hacking Attack
Hours after announcing its Chapter 11 bankruptcy filing, FTX was the victim of a hacking incident on November 12. Per multiple reports, the attackers made off with more than $400 million.
Moreover, speculation has started flying around that the incident has the makings of an insider job. The Chiliz founder also revealed that part of the stolen assets included 37 million CHZ.
From all indications, FTX users have a slim chance of ever getting their funds back. FTX currently has close to $9 billion in liabilities, with its liquid assets estimated to be only $900 million.
Nevertheless, the CHZ token lost over 30% of its value after hitting its all-time high of $0.75 last week. It currently trades at $0.18, per data from CoinMarketCap.
Huobi Funds Still Stuck with FTX
The crypto exchange revealed that funds belonging to its subsidiary, Hbit, are still in FTX’s custody. According to the firm, the funds amount to $13.2 million, including customers’ deposits. However, out of the $13.2 million, only $5 million belongs to Hbit.
With Huobi’s announcement, the number of victims in the FTX scandal continues to swell. According to Huobi, it has applied for $14 million in unsecured funding to help reduce the loss of customer funds.
The loan would be a $32 million liability for the firm. However, Huobi disclosed that the stuck assets would not impact its regular operations as Hbit activities are independent of the Huobi Group.
Meanwhile, the crypto community is skeptical of Huobi’s claim as concerns about the impact of the FTX exposure continue to rise.
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