Their Issuers Went Bankrupt, but These Tokens Have Survived

Bankrupt and beaten-up issuers haven’t stopped the rise of their “zombie tokens”

article-image

Romolo Tavani and Kiran 360 Degree/Shutterstock.com modified by Blockworks

share

The recent resilience of so-called zombie tokens — coins that have risen from the dead after the collapse of their issuers — have shocked crypto traders of late. 

The native tokens of Voyager, Luna, FTX and Celsius have now each outlived their troubled crypto parent companies. 

FTX’s FTT is back from the dead, up nearly 150% since the start of the year. And Voyager’s in-house token VGX has rallied more than 40% over the same period.

Zombie coins are all up at least 20% over the past month, but FTT is the clear winner | Chart by David Canellis

Terra Classic (LUNC) — a separate token from the issuer’s algorithmic stablecoin that collapsed last May — has clocked a more than 20% increase since the first of the year. Celsius’ native CEL has rallied around 40% in 2023, despite its bankrupt issuer. 

Cryptoassets with “large short interest are vulnerable to spikes in price as borrowing costs become unsustainable to hold short positions,” according to Darius Tabatabai, Vertex Protocol’s chief executive. 

“You saw this with equities like GameStop…over the last couple of years, so it isn’t exclusive to digital assets,” Tabatabai told Blockworks in a statement. 

Crypto volatility is nothing new, but with fewer exchanges facilitating spiking transactions, analysts are wondering who the buyers are. 

“By now, we are used to seemingly dead crypto assets experiencing a quick bout of volatility, but we had a bigger question: who is still market making for the FTT token?” Kaiko analysts wrote in a recent research note. “The amount of risk is immense, and we can be sure that there are very few firms left willing to touch anything remotely related to FTX.”

Crypto pairs dislocated 

FTT’s low trading volume — which dropped off a cliff when the exchange went under — and its dried-up liquidity has primed the token to rally, but there’s no evidence the run is set to be sustainable, according to the Kaiko analysts. 

When it comes to market depth for the tandem trading pair of FTT and Binance’s BUSD pair, there was only a slight increase in the amount of FTT supplied to its order book, according to Kaiko. That’s despite a large increase in price. 

Loading Tweet..

Through Tuesday morning in New York, the equivalent of just $160,000 FTT lies with 2% of the mid-price, the average amount between buyers and sellers, the report added.   

“In our markets, we look more at perpetual swap rates, but the dynamic is much the same,” Tabatabai said. “Add in a general worsening of liquidity through a withdrawal of market makers and capital, and the likelihood for short squeezes such as the ones we are seeing in these assets will be increased.”

As interest has surged in the native token of Celsius, the bankrupt lender is considering issuing a new token in order to make creditors whole, Celsius said in court Tuesday. The potential move would fall in line with previous maneuvers by Bitfinex, an exchange that issued tokens to customers victimized by a hack. 

Celsius’ plan would first have to go through a vote from creditors — including customers with funds locked on its platform — but the company’s bankruptcy judge would ultimately make the final decision.


Get the news in your inbox. Explore Blockworks newsletters:

Tags

Decoding crypto and the markets. Daily, with Byron Gilliam.

Upcoming Events

Old Billingsgate

Mon - Wed, October 13 - 15, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

Industry City | Brooklyn, NY

TUES - THURS, JUNE 24 - 26, 2025

Permissionless IV serves as the definitive gathering for crypto’s technical founders, developers, and builders to come together and create the future.If you’re ready to shape the future of crypto, Permissionless IV is where it happens.

Brooklyn, NY

SUN - MON, JUN. 22 - 23, 2025

Blockworks and Cracked Labs are teaming up for the third installment of the Permissionless Hackathon, happening June 22–23, 2025 in Brooklyn, NY. This is a 36-hour IRL builder sprint where developers, designers, and creatives ship real projects solving real problems across […]

recent research

REPORT_Template.png

Research

The Sonic blockchain is leveraging redesigned airdrop incentives and its FeeM program to propel DeFi activity and attract institutional capital, setting the stage for ecosystem growth. Within this environment, leading protocols Shadow Exchange and Silo are poised to asymmetrically benefit due to innovative features and favorable valuations, despite facing ecosystem dependency and competitive pressures. This positions them as compelling, potentially shorter-term, investment opportunities contingent on Sonic's sustained success.

article-image

Sponsored

WalletConnect is the default for secure, scalable onchain interaction — but this isn’t a peak, it’s the launchpad

article-image

Circle’s stock is expected to price at $31 and will go public on the NYSE Thursday

article-image

Solana’s most prolific token-launch tool might be prepping a token of its own

article-image

The tentative agreement China and the US penned last month appears to be in a precarious position

article-image

Fineqia’s Matteo Greco says Circle’s targeting a valuation in line with market expectations to avoid a post-launch drop like Coinbase

article-image

The President’s son reportedly said his family may pursue legal action