Helena Lyng Blak
2 weeks ago

Positive Plot Twist: FTX Has Plenty of Money to Pay Back Customers After Bankruptcy

In an unexpected turn of events, FTX reveals it has more than enough funds to fully settle its debts with customers post-bankruptcy. Here's how they turned their fortunes around.
Ljubljana, Slovenia - 21 January 2023: FTX cryptocurrency exchange logo on smartphone screen laying on computer keyboard — Photo by 24K-Production
Ljubljana, Slovenia - 21 January 2023: FTX cryptocurrency exchange logo on smartphone screen laying on computer keyboard — Photo by 24K-Production

On Tuesday, May 7, 2024, FTX–a now bankrupt company previously known for operating one of the leading cryptocurrency exchanges and crypto hedge funds–announced in a press release that it would be able to pay back the majority of its creditors, with interest.

FTX’s troubles began in November 2022, when crypto news site CoinDesk published a story that raised questions about the stability and sustainability of FTX and its sister trading firm Alameda Research’s financial practices and operations.

The allegations triggered an escalation in customer withdrawals, thus prompting a liquidity crisis within the company, ultimately leading to Chief Executive Officer Sam Bankman-Fried’s resignation. Subsequently, a new CEO was appointed by the court when FTX filed for Chapter 11 bankruptcy.

Then, in December 2022, Bankman-Fried was faced with both civil and criminal charges as the United States government accused the former CEO of a range of financial crimes, including fraud, conspiracy, and money laundering.

Bankman-Fried was convicted on all seven counts he was prosecuted for in November 2023 and was sentenced to 25 years in prison in March 2024.

Meanwhile, FTX has spent the intervening years selling assets and amassing as much liquidity as possible to pay back its customers.

In total, the company has announced that the total value of assets collected will, once converted to cash, amount to somewhere between $14.5 billion and $16.3 billion. 

This will be sufficient to pay back at least 118% of the allowed claims for 98% of the company’s former customers, while the remaining customers will receive 100% of their allowed claims.

Disclaimer

The information provided by this Site is for general informational purposes only. All information on the Site is provided in good faith, however we make no representation or warranty of any kind, express or implied, regarding the accuracy, adequacy, validity, reliability, availability or completeness of any information on the Site.

More News

4 hours ago Israeli Airstrike Hits Rafah Tent Camp Israeli airstrike on Rafah camp kills dozens, raising international alarm.
5 hours ago Meta and Call of Duty Maker Sued by Families of School Shooting Victims Families of the 2022 Uvalde school shooting victims file lawsuits against major corporations and officials, claiming they contributed to the tragedy.
7 hours ago Walmart and Capital One Call It Quits on Partnership Walmart and Capital One announce the end of their six-year card partnership amidst legal disputes.
7 hours ago US Market Open - May 27, 2024: Wall Street Wavers but Nasdaq Soars Daily update from the US market open.
9 hours ago Crypto, Currently: May 27, 2024 - Ethereum Leads Weekly Surge, Bitcoin Holds Steady Daily update on Ethereum, Bitcoin, and more!
1 day ago Debunking the headline: US GDP grows by a third ahead of EU in 15 years Europeans need not worry as much as these articles would suggest.
1 day ago Empowering Women Could Boost Economic Growth, Says IMF Economists Discover how gender equality initiatives could transform economies in Japan and Korea.