FTX creditors will be repaid, but how?

“We are happy to propose a plan (…) which envisages the return of 100% of the claimed sums associated with the bankruptcy plus interest to non-governmental creditors”, John J. Ray III proudly reveals, according to Reuters. The CEO of FTX filed a new reorganization plan with US authorities on Tuesday, May 7, which plans to return at least 118% of the assets required for 98% of the former cryptocurrency exchange’s damaged customers. In this case, those who held the equivalent of less than $50,000. Others have to find 100% of the amount, they report Reuters. The company would have between $14 billion and $16 billion for this purpose.

A small subtlety, and last but not least, this payment should be made in dollars and not in cryptocurrencies. However, since November 2022, when FTX filed for bankruptcy, the price of Bitcoin has increased significantly: + approximately 250%. So the whole question for injured investors is to know the current portfolio of the company to know if they could get more.

The fall of FTX began in the fall of 2022 with strong suspicions about its solvency, followed by a bank run and withdrawals were frozen, leaving 9 million users in the lurch. The equivalent of $8 billion of their funds were diverted to finance other activities, which earned Sam Bankman Fried, the former CEO of FTX, a 25-year prison sentence earlier this year.

RD

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