Some customers of failed cryptocurrency exchange FTX could receive the full amount of money they lost if a court approves the company's bankruptcy plan.
However, the gains from holding Bitcoin and other digital assets over the last two years have been You won't get it.
98% of FTX creditors, including retail investors who had assets of $50,000 or less in the company, will cash out their lost funds within 60 days of the restructuring, according to a press release filed by FTX on Tuesday. You will receive it at The plan goes into effect. The plan still needs to be approved by the court and creditors.
“We are pleased to be in a position to propose a Chapter 11 plan that considers the return of 100% of the bankruptcy debt and interest to non-governmental creditors,” said John J. Ray III said. FTX serves as Chief Restructuring Officer.
This plan was made possible in large part because FTX and its sister company Alameda Research held many of the other assets that the restructuring team sold. These included a stake in Anthropic, an Amazon-backed artificial intelligence startup currently valued at about $20 billion. FTX announced earlier this year that it had sold $900 million worth of its stock.
However, some claimants object to crypto assets being valued at November 2022 prices as part of the bankruptcy. Since that day, the price of Bitcoin has increased by more than 250%.
In February, the U.S. Department of Justice appointed independent examiner Robert Cleary to investigate potential conflicts of interest in the FTX bankruptcy involving FTX's law firm Sullivan & Cromwell.
A company spokesperson did not respond to a request for comment.
Adam Moskowitz, an attorney representing some of FTX's bankruptcy claimants, said unanswered questions remain about the bankruptcy process, even though the company has outlined unusually generous benefits to claimants. He said that
“We have serious concerns,” Moskowitz said.
Sullivan & Cromwell denies any wrongdoing.
FTX acknowledged that some creditors may think that what they get back in bankruptcy is not worth enough.
However, at the time of the collapse, FTX “held only 0.1% of Bitcoin and believed only 1.2% of Ethereum customers owned it,” the release states.
As such, FTX, which is referred to as the debtor in the bankruptcy case, “was unable to benefit from the appreciation in value of these lost tokens during the Chapter 11 litigation,” the press release said.
“Instead, debtors have had to turn to other sources of recoverable value to repay creditors.”
In March, former FTX chief Sam Bankman Fried was sentenced to 25 years in prison for masterminding the fraud that led to the exchange's collapse.
