Tags: ftx | customers | money | sam bankman fried

FTX Says Most Customers Will Get All Money Back

FTX Says Most Customers Will Get All Money Back
FTX founder Sam Bankman-Fried, who is now serving a 25-year prison sentence, leaves Manhattan federal court in New York on Feb. 16, 2023. (Seth Wenig/AP)

Wednesday, 08 May 2024 08:56 AM EDT

FTX says that nearly all of its customers will receive the money back that they are owed, two years after the cryptocurrency exchange imploded, and some will get more than that.

FTX said in a court filing late Tuesday that it owes about $11.2 billion to its creditors. The exchange estimates that it has between $14.5 billion and $16.3 billion to distribute to them.

The filing said that after paying claims in full, the plan provides for supplemental interest payments to creditors, to the extent that funds still remain. The interest rate for most creditors is 9%.

Customers and creditors that claim $50,000 or less will get about 118% of their claim, according to the plan, which was filed with the U.S. Bankruptcy Court for the District of Delaware. This covers about 98% of customers.

FTX said that it was able to recover funds by monetizing a collection of assets that mostly consisted of proprietary investments held by the Alameda or FTX Ventures businesses, or litigation claims.

FTX, which was once the third-largest cryptocurrency exchange in the world, filed for bankruptcy protection in November 2022 after it experienced the crypto equivalent of a bank run.

CEO and founder Sam Bankman-Fried resigned when the exchange collapsed. In March he was sentenced to 25 years in prison for the massive fraud that occurred at FTX.

Bankman-Fried was convicted in November of fraud and conspiracy — a dramatic fall from a crest of success that included a Super Bowl advertisement, testimony before Congress and celebrity endorsements from stars like quarterback Tom Brady, basketball point guard Stephen Curry and comedian Larry David.

The company appointed as its new CEO John Ray III, a long-time bankruptcy litigator who is best known for having to clean up the mess made after the collapse of Enron.

“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,” Ray said in a prepared statement.

That may be diminished consolation for investors at FTX. When the company sought bankruptcy protection in November 2022, bitcoin was going for $16,080. Prices have soared while the assets at FTX have been sorted out for the past two years. A single bitcoin on Tuesday was selling for close to $62,675. That comes out to a 290% loss, if those investors had held onto those coins.

The bankruptcy court is set to hold a hearing on June 25.

Copyright 2024 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without permission.


StreetTalk
FTX says that nearly all of its customers will receive the money back that they are owed, two years after the cryptocurrency exchange imploded, and some will get more than that.
ftx, customers, money, sam bankman fried
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2024-56-08
Wednesday, 08 May 2024 08:56 AM
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