FTX customers are poised to recover all of the money they lost in 2022 collapse of crypto exchange, bankruptcy lawyers reveal

Investors and customers of Sam Bankman-Fried’s failed cryptocurrency exchange FTC will get back all the money they lost after the company’s collapse, bankruptcy filings show.

FTX, which was at the heart of one of the largest fraud cases in US history, will have between $14.5 billion and $16.3 billion to reimburse an estimated 9 million creditors and customers for the money and possessions they have taken.

Under a restructuring plan from a federal court in Delaware, almost all of FTX’s customers and investors, including hundreds of thousands of normal people, will receive cash payments equivalent to 118% of the assets they have stored in FTX.

But the clawbacks will only be calculated based on the value of customers’ holdings in FTX at the time of bankruptcy in November 2022, meaning customers will not benefit from a recent surge in the price of Bitcoin that sent the price to an all-time high pushed.

The plan, which must still be approved by Judge John T. Dorsey, the federal judge overseeing the crypto exchange’s bankruptcy, would see refund payments sent within two months.

FTX, which was at the heart of one of the largest fraud cases in US history, will have between $14.5 billion and $16.3 billion to repay its estimated 9 million creditors and customers (File Image)

“We are pleased to be in a position to propose a Chapter 11 plan that seeks the return of 100% of bankruptcy claims plus interest for non-governmental creditors,” said CEO John Ray.

In February, the ailing cryptocurrency trading platform had $6.4 billion in cash.

But the company managed to raise the money by monetizing the assets it had on hand, most of which were investments owned by Alameda Research, a cryptocurrency-focused hedge fund controlled by fallen cryptocurrency wunderkind Sam Bankman -Fried, FTX Ventures companies, and lawsuits. claims.

Last month, SBF agreed to join a class action lawsuit against celebrities who promoted its crypto exchange.

By agreeing to work with the investors, the victims will now drop their civil liability claims against the criminal founder.

Celebrities include some major sports stars, including Tom Brady, Shaquille O’Neal, Stephen Curry and Shohei Ohtani.

Brady’s ex-wife Gisele Bundchen and actor Larry David are also among those accused of promoting unregistered securities for FTX and luring investors into a Ponzi scheme.

Nearly all of FTX’s customers and investors, including hundreds of thousands of normal people, will receive cash payments equivalent to 118% of the assets they have stored on FTX.

FTX founder Sam Bankman-Fried arrives at the U.S. Federal Courthouse in New York City on March 30, 2023

The lawsuit alleges that crypto Bankman-Fried and the celebrities he recruited to endorse the company are responsible for approximately $11 billion in losses for U.S. consumers.

Many of the stars were “ambassadors” for the trading platform, while others appeared in primetime commercials.

The plaintiffs hope they can recoup some of their losses following the collapse of FTX in November 2022.

Bankman-Fried, 32, appealed his federal conviction earlier this month after U.S. District Court Judge Lewis Kaplan set the prison sentence and ordered him to pay $11 billion in forfeiture.

In exchange for dropping him from the civil lawsuit, Bankman-Fried would hand over all non-privileged documents detailing his assets and his investment in the artificial intelligence startup Anthropc, an affidavit declaring his net worth as negative and documents about other defendants in the broadest sense of the word. various civil lawsuits.

Bankman-Fried has also agreed to release any information possible about venture capital firms that invested in FTX, along with a list of accountants and lawyers who worked with the exchange.