FTX to Fully Compensate Victims with Interest and Liquidated Assets

FTX, the cryptocurrency exchange that went bankrupt in November 2022, has announced a new plan that could see almost all of its customers getting back what they lost in cash, and then some. According to filings submitted to the U.S. Bankruptcy Court for the District Court of Delaware, FTX is set to have between $14.5 and $16.3 billion in cash after selling off all its assets, more than enough to cover the $11.2 billion it owes non-government creditors.

The proposed plan states that 98% of FTX’s creditors, who have claims of $50,000 or less, will receive 118% of their allowed claims in cash within 60 days if approved by the court. This unprecedented result in a bankruptcy case has been hailed by FTX CEO John Ray, who took over after the collapse of the exchange.

FTX was able to raise the necessary funds to repay its debts by selling off assets like its $900 million stake in AI firm Anthropic. However, it is unlikely that there will be anything left for shareholders once government claims are settled, as per U.S. bankruptcy law.

Customers will be paid based on cryptocurrency prices from 2022, not current prices, which has left some feeling disgruntled about their return on investment. Despite this, the majority of FTX’s customers are expected to be fully compensated for their losses.

FTX made headlines last year when it was labeled “one of the biggest financial frauds in American history” by U.S. prosecutors after customers lost $8 billion. Founder Sam Bankman-Fried was sentenced to 25 years in prison in March for his role in the scandal.