After a CoinDesk article on Alameda Research on 2 November 2022, customers started rapidly withdrawing assets from the Bahamas-based cryptocurrency exchange, FTX. The article alleged that Alameda Research (a trading firm owned by FTX’s CEO) held a substantial amount of FTT (FTX’s exchange token).
By 11 November 2022, customers were no longer able to withdraw their funds from FTX, as FTX, Alameda, and over 100 affiliated entities filed for bankruptcy, leaving customers to question how and when will FTX return the assets associated with their trading accounts.
Subsequently, Sam Bankman-Fried, the CEO of FTX, stepped down from his position, and a class-action lawsuit was filed against him and several other celebrities who promoted FTX. Late last year, Bankman-Fried was found guilty of fraud, conspiracy, and money laundering and was sentenced to 25 years in prison.
But Recently…
In a press release filed last Tuesday, FTX states that all customers whose assets were withheld in 2022 will receive a refund. In a recent court filing, FTX said it owed approximately $11.2 billion to its previous customers. The exchange also estimated that it owns between $14.5 billion and $16.3 billion that will be distributed to the aforementioned customers.
Seeing as though cryptocurrency prices have soared since their assets were originally frozen, many investors see this as a mere consolation prize. Compared to today’s $62,675 price of Bitcoin, the then-current price of $16,080 seems miniscule.
Nevertheless, all investors and creditors that claim $50,000 or less will receive 118% of their claim. According to FTX’s bankruptcy plan, this constitutes 98% of FTX’s eligible customers.
The company’s currency CEO John Ray III, a long-time bankruptcy litigator, stated:
“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”
