OAN’s Brooke Mallory
11:35am – Wednesday, May 8, 2024
Certain customers of defunct cryptocurrency exchange FTX could be entitled to the full amount of money they lost if a judge approves of the company’s bankruptcy plan.
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After the collapse of the FTX exchange in November 2022, you will not receive any holding gains made over the past two years, even though the value of Bitcoin and other digital assets has increased significantly.
FTX, which is “reorganizing”, said in a press release on Tuesday that 98% of its creditors, including retail investors (those with $50,000 or less), will get their money back in cash within 60 days of the restructuring plan taking effect. .
“This plan must be approved by the court and creditors.” NBC News report.
FTX Chief Executive Officer John J. Ray III said, “We are in a position to propose a Chapter 11 plan that considers repayment of 100% of the bankruptcy debt amount plus interest to non-governmental creditors.” I’m happy,” he said. He will also serve as Chief Structural Transformation Officer.
That strategy became possible after the restructuring team sold a number of other assets held by FTX and its sister business Alameda Research. That includes a stake in Amazon-backed artificial intelligence startup Anthropic, which is now valued at nearly $20 billion.
FTX said it sold $900 million worth of stock this year.
However, a small number of petitioners object to their virtual currency holdings being valued at interest rates starting in November 2022. Since then, Bitcoin has risen over 250%.
FTX acknowledged that some claimants may feel that the benefits they receive from bankruptcy are inadequate. However, the announcement stated that at the time of the failure, FTX was believed to have held “only 0.1% of Bitcoin customers and 1.2% of Ethereum customers.”
FTX, which is cited as a debtor in the bankruptcy case, “was unable to benefit from the appreciation in value of these lost tokens during the Chapter 11 litigation,” according to the press release.
“Instead, debtors have had to turn to other sources of recoverable value to repay creditors.”
Sam Bankman Fried, the former head of FTX, was sentenced in March to 25 years in prison for orchestrating the fraud that led to the exchange’s collapse.
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