The FTX logo appears on the jacket of home plate umpire Jansen Visconti during a baseball game against the Minnesota Twins on September 27, 2022 in Minneapolis.
Bruce Clarkhorn/AP
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Bruce Clarkhorn/AP
The FTX logo appears on the jacket of home plate umpire Jansen Visconti during a baseball game against the Minnesota Twins on September 27, 2022 in Minneapolis.
Bruce Clarkhorn/AP
FTX says nearly all of its customers will receive the funds they are owed, and some will get even more, two years after the cryptocurrency exchange collapsed.
FTX said in a court filing late Tuesday that it owes creditors approximately $11.2 billion. The exchange estimates it could allocate $14.5 billion to $16.3 billion to them.
After claims are paid in full, the plan provides for supplemental interest payments to creditors while funds remain available, the filing said. The interest rate for most creditors is 9%.
For investors who traded cryptocurrencies on exchanges during the crash, this may be of diminished comfort. When FTX sought bankruptcy protection in November 2022, the price of Bitcoin was $16,080. But as the economy recovered, and FTX assets consolidated over the past two years, cryptocurrency prices soared. On Tuesday, one Bitcoin sold for nearly $62,675. If these investors held the tokens, this would result in a 290% loss, which is slightly less than the accrued interest.
Customers and creditors with claims of $50,000 or less will receive about 118% of their claims, according to the plan filed with the U.S. Bankruptcy Court in Delaware. This covers approximately 98% of FTX customers.
FTX said it will be able to recover funds by monetizing a range of assets, which primarily include proprietary investments or litigation claims held by Alameda or FTX Ventures businesses.
FTX, which at the time was the world’s third-largest cryptocurrency exchange, filed for bankruptcy protection in November 2022 after experiencing the cryptocurrency equivalent of a bank run.
Following the exchange’s collapse, CEO and founder Sam Bankman-Fried resigned. In March this year, he was sentenced to 25 years in prison for FTX’s massive fraud.
Bankman-Fried, who was convicted of fraud and conspiracy in November, has had the pinnacle of his success include Super Bowl commercials, testimony before Congress and appearances by quarterbacks Tom Brady, basketball point guard Stephen Curry and Endorsements from celebrities including comedian Larry David.
The company named as its new chief executive John Ray III, a longtime bankruptcy lawyer known for cleaning up the mess left by Enron’s collapse.
“We are pleased to be able to propose a Chapter 11 plan that contemplates returning 100% of the bankruptcy claim amount plus interest to non-governmental creditors,” Wray said in a prepared statement.
FTX is still technically a company, but its future is unclear. In early 2023, Ray said that he had formed a working group to explore revitalizing cryptocurrency exchange FTX.com.
The sordid details of a company’s rampage after its assets were seized will stymie nearly any business trying to make a comeback, but cryptocurrency exchanges may also have different parameters.
Rival cryptocurrency exchange Binance briefly explored acquiring FTX before collapsing in late 2022. related funds.
Binance remains the largest cryptocurrency exchange in the world.
The bankruptcy court is scheduled to hold a hearing on the dispersion of FTX assets on June 25.
