Most customers of crypto firm will get all money back

[Pelican Press 0]

Most customers of crypto firm will get all money back

Sam Bankman-Fried, co-founder of FTX Cryptocurrency Derivatives Exchange, arrives at court in New York, US, on Thursday, Feb. 16, 2023.

Yuki Iwamura | Bloomberg | Getty Images

Almost all customers of collapsed cryptocurrency exchange FTX will get their money back — and more, according to a court filing.

FTX estimates that it owes creditors around $11.2 billion, according to a reorganization plan published late Tuesday. The company said it has between $14.5 billion and $16.3 billion to distribute to creditors.

Customers whose claims amount to $50,000 or less will receive approximately 118% of the amount of their allowed claim, the plan says. Around 98% of creditors will receive this compensation.

The reorganization plan, which still needs to be approved by the bankruptcy court, will likely bring some relief to FTX customers, whose money has been locked up with the exchange since it filed for bankruptcy protection in November 2022.

FTX’s high-profile founder, Sam Bankman-Fried, was convicted of seven ********* counts in early November, including charges related to stealing billions of dollars from FTX’s customers. He received a 25-year prison sentence.

FTX managed to raise the money by selling a number of assets, including venture investments held by the exchange and other investments held by Alameda, Bankman-Fried’s crypto hedge fund.

One of FTX’s most high-profile investments was in artificial intelligence firm Anthropic, a company backed by

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. FTX sold most of its stake in Anthropic this year, earning nearly $900 million.

FTX had to find other ways to raise money because it has large sum of cryptocurrency missing from the exchange.

“Accordingly, the Debtors have not been able to benefit from the appreciation of these missing tokens during the chapter 11 cases. Instead, the Debtors have had to look to other sources of recoverable value to repay creditors,” FTX said in a press release Wednesday.

Crypto prices have appreciated massively since November 2022. Bitcoin is up around 270% since FTX’s bankruptcy filing.

After Bankman-Fried stepped down, FTX appointed John Ray III as CEO. Speaking about FTX in November 2022, Ray said that “in his 40 years of legal and restructuring experience,” he had never seen “such a complete ******** of corporate controls and such a complete absence of trustworthy financial information as occurred here.”

“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 the press release Wednesday.

— CNBC’s MacKenzie Sigalos contributed to this report.

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FinTech,Bitcoin/USD Coin Metrics,Technology,Bitcoin,Cryptocurrency,Cryptocurrency exchanges,Sam Bankman-Fried,Bankruptcy Figures,Corporate bankruptcy,

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