Customers of the collapsed crypto exchange FTX will recover their funds.

The CEO stated that creditors will receive $11.2 billion, but they won't benefit from the recent price increases in Bitcoin.
Customers of the collapsed crypto exchange FTX will recover their funds

Crypto Exchange FTX 

Following the bankruptcy of the collapsed crypto exchange FTX two years ago, it has announced that customers will recover all lost funds. After CEO John Ray III revealed a bankruptcy plan that would raise between $14.5 billion and $16.3 billion from asset sales, creditors will be paid $11.2 billion.

Repayments, which will also include interest for some FTX users, will be in line with the value of Bitcoin at the time of the exchange’s collapse. Since then, the price of the cryptocurrency has appreciated by more than threefold, meaning creditors won’t benefit from the higher prices of Bitcoin, but most will benefit from a 9% interest rate.

Ray III stated, ‘We are pleased to propose an 11th chapter plan that provides for the return of 100% of the bankruptcy claim amounts, plus interest, for non-governmental creditors.’

Why is the Bitcoin Price Falling

According to the plan filed with the US Bankruptcy Court for the District of Delaware, customers and creditors with claims of $50,000 or less will receive approximately 118% of their claims, covering about 98% of the customers. FTX stated that it was able to recover funds by generating income from a total of assets, mainly consisting of private investments held by Alameda or FTX Ventures businesses, or lawsuit claims.

Once the world’s third-largest cryptocurrency exchange, FTX filed for bankruptcy protection in November 2022 after experiencing the crypto equivalent of depositors trying to withdraw funds en masse from a bank.

The company had appointed a longtime bankruptcy attorney known for cleaning up the messes left behind by Enron’s collapse as its new CEO.

In a prepared statement, Ray said, ‘We are pleased to propose an 11th chapter plan that provides for the return of 100% of the bankruptcy claim amounts, plus interest, for non-governmental creditors.’

The hearing is set to take place in bankruptcy court on June 25.

Former CEO and founder Sam Bankman-Fried was sentenced to 25 years in prison in March for his role in the collapse of the crypto exchange.

Once known as the ‘Crypto King,’ Bankman-Fried had previously been a prominent figure in the industry, appearing before Congress and garnering support from celebrities such as NFL star Tom Brady and comedian Larry David.

Judge Lewis Kaplan had remarked during sentencing that the 32-year-old showed ‘not a word of remorse for the horrific crimes he committed.’

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