Key Insights
- Chiliz announces its recovery plan to protect CHZ holders from the FTX crash
- The CEO announced that they would compensate up to $10,000 per FTX user who lost their crypto in the FTX collapse.
- Chiliz will engage in legal review and seek approval from the liquidator before releasing the funds.
Chiliz announced support for FTX users days after FTX, one of the largest crypto exchanges, filed for bankruptcy. Shortly after the filing, the exchange was attacked, with damage worth about $477 million recorded.
Since the CEO of FTX confirmed the news, many investors have been in a panic. Reports show that most of them might be unable to get back their investment if the stolen funds are not recovered.
Since then, various players in the industry have been injecting some relief steps and measures. They hope that these relief plans will douse the tension and panic.
The first platform to roll out a rescue plan is TRON labs, followed by Bitget, a derivative exchange. Similarly, Chiliz has a recovery plan for affected FTX users.
Chiliz Allocates 38million CHZ As Recovery Plan For affected FTX Investors
Chiliz is an altcoin and a native token of the Socios Crypto Network. Founded in 2018 by Alexandre Dreyfus—Chiliz aims to use cryptocurrency and blockchain-backed fan platforms as tools to empower sports and esports fans.
Fast forward to 2022, Chiliz comes to the rescue of its holders affected by the FTX crash.
On the 13th of November, Alexandre Dreyfus, the CEO of Chiliz, announced a recovery plan for FTX users. In his tweet, he said Chiliz would allocate 38 million CHZ to public addresses to compensate up to $10,000 per FTX user that held CHZ on the exchange.
Furthermore, Alexander Dreyfus estimated that 38 million CHZ were stolen. He said that last week before the attack, FTX had 38 million CHZ in their on-chain wallet.
Similarly, the recovery plan will begin over the next few weeks. Before then, Chiliz says it will have to engage with the liquidator before facilitating the token distribution. Chiliz’s CEO is optimistic that the recovery plan will “help make CHZ users on FTX whole.”
He said the individuals are the target of the recovery plan and not the institution (FTX exchange).
However, he added that the recovery plan is still subject to complete legal review and approval from the liquidator— to provide us with the list of users.
Conclusion
The announcement of the recovery plan aims to assure CHZ holders that they will compensate for their losses. The aim is to compensate every user whose losses amount to about $10,000 — making them whole after the bankruptcy and collapse of FTX.
Furthermore, experts consider the recovery plan a good initiative to protect CHZ holders. However, experts are bearish on Chiliz and opined that the price value would likely drop due to this support to the crashed FTX.
