FTX Customers Will Get Back All the Money They Lost in the Collapse

FTX co-founder and former CEO Sam Bankman-Fried was sentenced to 25 years in prison for his role in the exchange’s collapse.
Photo: Michael M. Santiago (Getty Images)

Nearly all of FTX’s former customers will get back almost 100% of the money they lost at the time of the cryptocurrency exchange’s collapse — if not more.

FTX said in a statement Tuesday that it expects 98% of its creditors to receive approximately 118% of the amount of their allowed claims. Others will receive 100% of their claims plus billions in interest as compensation for the time value of their investments.

The company forecasts that the total value of the assets, converted to cash and made available for distribution, will be between $14.5 and $16.3 billion. The updated reorganization plan, as outlined in filings in Delaware bankruptcy court submitted Tuesday, will be funded from cash that the company has on hand, available NFTs, wind-down cash proceeds, and any remaining assets.

Shareholders’ claims will be calculated based on their holdings as of November 2022, when the crypto exchange filed for Chapter 11 bankruptcy. The announcement was likely welcomed by former customers, whose money was locked up amid court proceedings. At the time of the collapse, it was believed that billions of dollars worth of customer deposits in FTX would likely never be recovered.

Sam Bankman-Fried, who co-founded the crypto exchange in 2019 and became known as the “Crypto King,” was convicted of fraud last year in FTX’s stunning collapse. He was sentenced in March to 25 years in prison.

The new reorganization plan is pending finalization and approval from the bankruptcy court. Customers should expect to begin receiving their money within 60 days of the plan’s effective date, which will be set by the court.

“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,” said John J. Ray III, CEO and chief restructuring officer of FTX. He also thanked FTX’s customers and creditors for their patience throughout the 17-month-long process.

This article originally appeared on Quartz.

Source link

We will be happy to hear your thoughts

      Leave a reply

      Fashion Craze
      Shopping cart