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Most crypto company customers will receive all their money
Sam Bankman-Fried, co-founder of FTX Cryptocurrency Derivatives Exchange, arrives in court in New York, U.S., Thursday, February 16, 2023.
Yuki Iwamura | Bloomberg | Getty Images
Almost all customers of collapsed cryptocurrency exchange FTX will be refunded — and more, according to a court filing.
FTX estimates it owes approximately $11.2 billion to its creditors, according to a reorganization plan released Tuesday evening. The company said it had between $14.5 billion and $16.3 billion to distribute to creditors.
Customers with claims of $50,000 or less will receive approximately 118% of their authorized claim amount, the plan states. Around 98% of creditors will receive this compensation.
The reorganization plan, which still must be approved by the bankruptcy court, will likely provide some relief to FTX customers, whose money has been stuck on the exchange since its inception. filed for bankruptcy protection in November 2022.
FTX founder Sam Bankman-Fried was found guilty of seven counts in early November, including accusations related to the theft of billions of dollars from FTX clients. He was sentenced to 25 years in prison.
FTX managed to raise funds by selling a number of assets, including venture capital investments held by the exchange and other investments held by Alameda, Bankman-Fried’s crypto hedge fund.
One of FTX’s biggest investments was in an artificial intelligence company Anthropic, a supported company by Amazon. FTX sold most of its stake in Anthropic this year, earning nearly $900 million.
FTX has had to find other ways to raise funds because the exchange is missing a large amount of cryptocurrency.
“As a result, the Debtors were unable to take advantage of the appreciation of these missing tokens during the Chapter 11 cases. Instead, the Debtors had to turn to other sources of recoverable value to repay the creditors,” FTX said in a press release on Wednesday. .
Cryptocurrency prices have appreciated significantly since November 2022. Bitcoin is up about 270% since FTX filed for bankruptcy.
Following Bankman-Fried’s resignation, FTX named John Ray III as CEO. Talking about FTX in November 2022Ray said that “in his 40 years of legal and restructuring experience” he had never seen “such a complete failure of corporate controls and such a complete absence of reliable financial information as happened here.”
“We are pleased to be able to propose a Chapter 11 plan that contemplates repayment of 100% of the bankruptcy claim amounts plus interest to non-governmental creditors,” Ray said in the press release Wednesday. .
— CNBC’s MacKenzie Sigalos contributed to this report.