By MICHELLE CHAPMAN
Updated [hour]:[minute] [AMPM] [timezone], [monthFull] [day], [year]
FTX says that nearly all of its customers will receive the money back that they are owed, two years after the cryptocurrency exchange imploded, and some will get more than that.
FTX said in a court filing late Tuesday that it owes about $11.2 billion to its creditors. The exchange estimates that it has between $14.5 billion and $16.3 billion to distribute to them.
The filing said that after paying claims in full, the plan provides for supplemental interest payments to creditors, to the extent that funds still remain. The interest rate for most creditors is 9%.
That may be a diminished consolation for investors who were trading cryptocurrency on the exchange when it collapsed. When FTX sought bankruptcy protection in November 2022, bitcoin was going for $16,080. But crypto prices have soared as the economy recovered while the assets at FTX were sorted out over the past two years. A single bitcoin on Tuesday was selling for close to $62,675. That comes out to a 290% loss, a bit less than that if accrued interest is counted, if those investors had held onto those coins.
Customers and creditors that claim $50,000 or less will get about 118% of their claim, according to the plan, which was filed with the U.S. Bankruptcy Court for the District of Delaware. This covers about 98% of FTX customers.
FTX said that it was able to recover funds by monetizing a collection of assets that mostly consisted of proprietary investments held by the Alameda or FTX Ventures businesses, or litigation claims.
FTX was the third-largest cryptocurrency exchange in the world when it filed for bankruptcy protection in November 2022 after it experienced the crypto equivalent of a bank run.
CEO and founder Sam Bankman-Fried resigned when the exchange collapsed. In March he was sentenced to 25 years in prison for the massive fraud that occurred at FTX.
Bankman-Fried was convicted in November of fraud and conspiracy — a dramatic fall from a crest of success that included a Super Bowl advertisem*nt, testimony before Congress and celebrity endorsem*nts from stars like quarterback Tom Brady, basketball point guard Stephen Curry and comedian Larry David.
The company appointed as its new CEO John Ray III, a long-time bankruptcy litigator who is best known for having to clean up the mess made after the collapse of Enron.
“We are pleased to be in a position to propose a chapter 11 plan that contemplates the return of 100% of bankruptcy claim amounts plus interest for non-governmental creditors,” Ray said in a prepared statement.
FTX, technically, remains a company but its future is unclear. In early 2023, Ray said that he had formed a task force to explore reviving FTX.com, the crypto exchange.
The sordid details of a company run amuck that emerged after its assets were seized would hamstring almost any business attempting a comeback, but there may also be different parameters for cryptocurrency exchanges.
The rival crypto exchange Binance briefly explored acquiring FTX before it collapsed in late 2022. Its founder and former CEO Changpeng Zhao, was sentenced last week to four months in prison for looking the other way as criminals used the platform to move money connected to child sex abuse, drug trafficking and terrorism.
Binance is still the largest crypto exchange in the world.
The bankruptcy court is set to hold a hearing on the dispersion of FTX assets on June 25.
FAQs
FTX says that nearly all of its customers will receive the money back that they are owed, two years after the cryptocurrency exchange imploded, and some will get more than that. FTX said in a court filing late Tuesday that it owes about $11.2 billion to its creditors.
How much will FTX customers get back? ›
If the court confirms that Chapter 11 bankruptcy plan, its confirmation will allow FTX to repay over 98% of customers and unsecured creditors “in full with interest,” using a USD calculation for all crypto asset prices as of November 11, 2022.
Did FTX pay back investors? ›
FTX now says that 98% of its creditors, including individual investors who had US$50,000 or less with FTX, will receive the funds they lost. Payments will be made in cash within 60 days of a reorganisation plan going into effect. However, this plan still needs to be approved by a US bankruptcy court and by creditors.
How bad is FTX collapse? ›
At that time, FTX had customer assets at risk of around $10–50 billion, which is a remarkable amount compared to other famous bankruptcies such as Lehman Brothers ($106 billion),2 making the FTX collapse one of the biggest financial events in American history.
How much did Bitcoin drop after FTX? ›
The leading cryptocurrency by market value fell over 8% to under $62,000, data from charting platform TradingView show. That's the biggest single-day percentage (UTC) decline since Nov. 9, 2022. That day, prices tanked over 14% as Sam Bankman Fried's FTX exchange, formerly the third largest, went bankrupt.
Have FTX customers been repaid? ›
FTX has committed to a bankruptcy liquidation that will repay customers whose deposits were locked during its late 2022 collapse. A United States court has ordered bankrupt cryptocurrency exchange FTX to pay $12.7bn in relief to its customers, the Commodity Futures Trading Commission has said.
Are FTX customers to recover all lost funds with interest? ›
FTX customers are set to recover all funds lost, plus interest. Bankruptcy lawyers say they have collected $14.5 billion to $16.3 billion and are ready to distribute it to defrauded customers.
Did FTX customers lose their money? ›
At Bankman-Fried's sentencing hearing, Kaplan agreed. He said FTX's customers had lost some $8bn and that its investors had lost $1.7bn.
How much money has been recovered from FTX? ›
Those who lost money when the exchange collapsed in November 2022 are owed around $11 billion, but the estate been able to recover as much as $16.3 billion, court records filed on Tuesday show. As a result, claims will be repaid with interest.
Who lost the most money with FTX? ›
Sequoia Capital likely suffered the greatest loss for an outside investor in the exchange with its $200 million investment, which peaked at $350 million in January 2022, according to data obtained by Forbes. RELATED: Who Is FTX Founder Sam Bankman-Fried?
Assuming a constant monthly investment of $500 for 10 years and a bitcoin price of $1 million per coin at the end, you would earn a profit of approximately $4.8 million.
Where did FTX money go? ›
FTX founder Sam Bankman-Fried and senior staff spent customer funds on technology investments, luxury real estate and political contributions, among other things. The missing funds are at the heart of Bankman-Fried's criminal trial, which kicked off in Manhattan federal court this week.
Who owns the most Bitcoin? ›
So, who are the top holders of BTC? According to the Bitcoin research and analysis firm River Intelligence, Satoshi Nakamoto, the anonymous creator behind Bitcoin, is listed as the top BTC holder as of 2024. The company notes that Satoshi Nakamoto holds about 1.1m BTC tokens in about 22,000 different addresses.
Will FTX customers be refunded? ›
Nearly all customers of FTX will get their money back, plus interest, after the cryptocurrency exchange imploded 17 months ago.
Did FTX victims get their money back? ›
FTX customers will get their money back and more—but the biggest winners are bankruptcy traders. Sam Bankman-Fried, the former CEO of FTX, is serving a 25-year sentence. In a rare outcome for bankruptcy, customers of the failed cryptocurrency exchange FTX will recover all of their money—and then some.
What will happen to FTX customers? ›
FTX says it will return money to most of its customers : NPR. FTX says it will return money to most of its customers FTX says that nearly all of its customers will receive the money back that they are owed, two years after the cryptocurrency exchange imploded, and some will get more than that.
Are FTX customers getting money back on Reddit? ›
Most FTX customers to get all their money back less than 2 years after collapse : r/news.
