FTX says it can repay most customers all funds
FTX founder Sam Bankman-Fried was sentenced to 25 years in prison for defrauding customers and investors
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Bankrupt crypto exchange FTX says most of its customers will be paid back in full for the assets lost at the time of its collapse nearly two years ago, and some will receive more.
The company said in a press release that 98% of FTX customers will receive at least 118% of their claims, and others will receive 100% plus billions of dollars in compensation for the time value of their money.
Former FTX chief executive Sam Bankman-Fried arrives to enter a plea before U.S. District Judge Lewis Kaplan in Manhattan federal court, New York, on Jan. 3, 2023. (ED JONES/AFP via Getty Images / Getty Images)
The plan, which is still subject to approval by a bankruptcy court, comes after FTX founder and former CEO Sam Bankman-Fried was sentenced to 25 years in prison for defrauding customers and investors of the exchange.
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The debtors said they were unable to take advantage of the surge in value of crypto assets in order to make customers whole, noting that FTX only held 0.1% of the bitcoin and 1.2% of the etherium customers believed the exchange held when it went belly-up amid a "run on the bank" in November 2022.
Instead, FTX said, it was able to recover the funds mostly from proprietary investments made by FTX and its sister hedge fund, Alameda Research, along with litigation claims.
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"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," FTX CEO John Ray III said in a statement.
John Ray, chief executive officer of FTX Cryptocurrency Derivatives Exchange, speaks during a House Financial Services Committee hearing investigating the collapse of FTX in Washington, D.C., on Dec. 13, 2022. (Al Drago/Bloomberg via Getty Images / Getty Images)
He went on to thank "numerous governmental agencies, including the United States Department of Justice, the Commodity Futures Trading Commission, the Internal Revenue Service and the Securities Commission of The Bahamas, for their tireless efforts, cooperation and assistance through this complex recovery process."