In a surprising turn of events, bankrupt cryptocurrency exchange FTX has revealed it may have enough funds to fully repay its customers. This news comes just months after FTX’s spectacular collapse in November 2022, which left millions of customers fearing significant losses.
According to a newly proposed reorganization plan, FTX expects to have between $14.5 billion and $16.3 billion after selling off its remaining assets. This amount significantly exceeds the estimated $11 billion owed to creditors, raising the possibility of a full recovery for all customers.
Also Read: FTX Files For Chapter 11 Bankruptcy Protection
This positive development comes amidst the ongoing legal repercussions of the FTX scandal. Former CEO Sam Bankman-Fried was sentenced to 25 years in prison in March 2024 for defrauding investors and customers. John Ray, the newly appointed CEO of FTX, expressed optimism about the repayment plan, stating, “We are pleased to be able to propose a plan that contemplates the return of 100% of bankruptcy claim amounts, plus interest, for non-governmental creditors.”
The proposed plan hinges on the successful sale of FTX’s remaining assets. These assets are primarily investments held by Alameda Research, a crypto trading firm previously controlled by Bankman-Fried, and FTX Ventures businesses. The successful liquidation of these assets has exceeded initial expectations, creating the potential for full customer recovery.
Also Read: Genesis Files For Bankruptcy Following The Collapse of Crypto Exchange FTX
However, the plan still requires approval by a US bankruptcy court. This approval process may take some time and could face potential challenges. Yet, the news offers a glimmer of hope for FTX customers who feared significant financial losses. If approved, this case could represent a rare instance in bankruptcy proceedings where creditors receive full repayment, a welcome deviation from the usual scenario where creditors face significant haircuts.
Disclaimer:
This information is for informational purposes only and should not be considered financial advice. The information in this article is based on a proposed FTX reorganization plan that is available on the internet and may not be fully accurate or verified. The situation surrounding FTX’s bankruptcy is complex and evolving. The possibility of full repayment for customers is based on the proposed reorganization plan, which requires court approval and may not be guaranteed. It’s important to consult with a financial professional before making any investment decisions.
