Sam Bankman Fried, co-founder of the FTX cryptocurrency derivatives exchange, will appear in court in New York, US, on Thursday, February 16, 2023.
Yuki Iwamura | Bloomberg | Getty Images
Almost all customers of bankrupt cryptocurrency exchange FTX will receive refunds and more, according to court filings.
According to a restructuring plan announced late Tuesday, FTX estimates it owes about $11.2 billion from creditors. FTX said it has $14.5 billion to $16.3 billion in funds to distribute to creditors.
Under the plan, customers with bills of $50,000 or less would receive about 118% of their allowed bills. Approximately 98% of creditors will receive this compensation.
The restructuring plan still requires bankruptcy court approval, but will likely bring some relief to FTX customers whose funds have been locked up on the exchange since it filed for bankruptcy in November 2022.
FTX's prominent founder, Sam Bankman Fried, was found guilty in early November on seven criminal charges, including stealing billions of dollars from FTX's customers. He was sentenced to 25 years in prison.
FTX raised funds by selling a number of assets, including venture investments held by the exchange and other investments held by Bankman Freed's cryptocurrency hedge fund Alameda.
One of FTX's most high-profile investments was in Amazon-backed artificial intelligence company Anthropic. FTX sold most of its Anthropic stock this year, netting nearly $900 million.
FTX needed to find other ways to raise funds as exchanges were missing large amounts of cryptocurrencies.
“Thus, the debtor could not benefit from the increase in value of these lost tokens during the Chapter 11 case. Instead, the debtor could use other recoveries to repay creditors. “We had to look at other sources of value,” FTX said in a press release. Wednesday.
Cryptocurrency prices have increased significantly since November 2022. Bitcoin is up about 270% since FTX filed for bankruptcy.
Following Bankman Fried's resignation, FTX appointed John Ray III as CEO. Speaking about FTX in November 2022, Ray said, “In my 40 years of legal and business restructuring experience, I have never seen a complete failure of corporate management and a complete lack of reliable financial information like what happened here.” He said he had never seen it.
“We are pleased to be in a position to propose a Chapter 11 plan that contemplates the return of 100% of the bankruptcy debt amount plus interest to non-governmental creditors,” Ray said in a statement Wednesday.
— CNBC's MacKenzie Sigalos contributed to this report.
