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FTX Will Pay Billions Back To Customers
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By Nithya Bose in Business News, posted May 8, 2024
Fallen cryptocurrency exchange FTX has announced it has billions of dollars more than it needs to repay its customers.
The company said it expects to have around $16.3 billion available to settle its debts, totaling around $11 billion.
This is after liquidating its remaining assets,
According to its reorganization plan, nearly all its customers could receive full reimbursement for their losses and interest for non-governmental creditors.
This proposal, however, still requires the approval of a US bankruptcy court.
John Ray, the new CEO of FTX, said: "We are pleased to be in a position to propose a chapter 11 plan that contemplates the return of 100% of bankruptcy claim amounts plus interest for non-governmental creditors."
The funds needed to cover these claims are being raised through the sale of assets and investments.
These are held by held by Alameda Research and FTX Ventures.
Both of them were businesses controlled by Sam Bankman-Fried, FTX's co-founder.
In March this year, Bankman-Fried was sentenced to 25 years in prison for defrauding customers and investors.
Despite major increases in cryptocurrency prices since FTX's bankruptcy filing, the company said this has not substantially boosted its financial recovery.
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Bitcoin has surged since FTX collapse
The revelation comes against a backdrop where Bitcoin has surged by about 270 percent since FTX declared bankruptcy over eighteen months ago.
Before its collapse in November 2022, FTX was one of the world’s largest cryptocurrency platforms.
It attracted millions of customers and achieved celebrity status through its founder, Bankman-Fried.
The platform’s rapid downfall began with customers' massive withdrawal of funds, prompted by reports of financial instability.
It ultimately exposed the full scale of Bankman-Fried's criminal activities.
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