Bankruptcy lawyers representing clients affected by the dramatic collapse of cryptocurrency exchange FTX 17 months ago say the majority of victims will get their money back, plus interest.
The news comes as FTX co-founder and former CEO Sam Bankman Fried (SBF) was found guilty on seven counts related to fraud, conspiracy, and money laundering, and his client The announcement comes six months after nearly $8 billion in funds went missing. In March, SBF was sentenced to 25 years in prison and ordered to pay $11 billion in forfeitures. The crypto mogul filed an appeal last month that could last for years.
restructuring
After filing for bankruptcy in late 2022, SBF stepped down and U.S. attorney John J. Ray III was brought in as CEO and “chief restructuring officer” responsible for overseeing FTX's restructuring. Shortly after his appointment, Mr. Wray said in his testimony that despite some of the audits previously conducted at FTX, he “did not trust a single piece of paper in this organization.” . Over the next few months, Ray and his team set out to trace the missing funds, which amounted to about $8 billion in real estate, political donations, and venture capital investments. That included his $500 million investment in his AI company Anthropic before the generative AI boom. FTX Estates was successfully sold for $884 million earlier this year.
While it initially seemed unlikely that investors would recover much, if any, of their money, signs in recent months indicate that FTX is making progress in recovering cash through various investments it has made. was seen, suggesting that good news may be on the way. From executives involved in the company.
Currently, 98% of FTX creditors will receive 118% of the value of assets held in FTX in cash, while other creditors will receive 100% plus “billions of dollars in compensation for the time value of their investments.” is known to receive. Press release issued by FTX Estate today.
FTX said it could distribute cash totaling between $14.5 billion and $16.3 billion, including assets currently controlled by entities including Chapter 11 debtors. liquidators, the Bahamas Securities Commission, the United States Department of Justice, and various other parties.
The reorganization plan, which must be approved by the relevant bankruptcy court, is aimed at resolving all ongoing disputes with stakeholders and governments “without costly and lengthy litigation,” the company said.
It is worth noting here that since FTX went bankrupt, creditors have not been able to benefit from the Bitcoin boom that has arisen from the crypto industry. At the time of its bankruptcy filing, FTX had huge shortfalls in Bitcoin and Ethereum, far less than its customers actually thought they had.
Therefore, no increase in the value of these tokens will be realized as part of this settlement.
