NY, May 8, 2024 – There is light at the end of the tunnel for creditors of the cryptocurrency exchange FTX, which collapsed 17 months ago. The vast majority of them will get their money back, and even receive interest on top of it. This was according to bankruptcy lawyers representing the affected clients.
Following FTX’s dramatic downfall in 2022, it seemed that investors would lose a significant portion of their funds. The exchange’s leadership under Sam Bankman-Fried (SBF) faced charges of fraud, conspiracy, and money laundering, with approximately $8 billion disappearing from client accounts. SBF was sentenced to 25 years in prison, and the company FTX filed for bankruptcy.
However, despite the bleak outlook, significant progress has been made under the leadership of John J. Ray III, who was appointed to restructure FTX. Substantial amounts of the lost funds have been recovered from various investments and from the leadership. This will allow FTX to distribute between $14.5 and $16.3 billion in cash.
Most creditors (98%) will receive 118% of the value of their assets held on FTX in cash. Other creditors will receive 100% of their investment plus compensation for the loss of value over time. The restructuring plan does need to be approved by the bankruptcy court, but the goal is to resolve all disputes without lengthy and costly litigation.
While this news brings hope for FTX creditors, it is important to note that they will not profit from the rise in Bitcoin’s price since the exchange’s collapse. The restructuring plan is just a proposal and may still change.
Despite the challenges and scandals that plagued FTX, this solution offers a glimmer of hope for its creditors and shows that even in complex situations, there is a chance for fair compensation.
Here is a summary of the key points:
- 98% of creditors will receive 118% of the value of their assets in cash.
- Remaining creditors will receive 100% of their investment plus compensation for loss of value over time.
- FTX will distribute between $14.5 and $16.3 billion in cash to its creditors.
- The restructuring plan must be approved by the bankruptcy court.
- The goal is to avoid litigation and resolve disputes without unnecessary delays and costs.
- Creditors will not profit from the rise in Bitcoin’s price since FTX’s collapse.
- This is currently a draft plan that may still change.
Important:
- These numbers are just estimates and the final amount may vary.
- The restructuring plan is a complex process and may take several months to finalize.
- Creditors should monitor official information from FTX and the bankruptcy court for the latest updates.
Overall, this is a positive development for FTX creditors, even though the restructuring process may take some time.
