Failed crypto firm FTX says has more than needed to pay victims
www.bbc.com
The failed cryptocurrency giant says it has billions of dollars more than needed to cover its debts.

The firm says that once it has sold off its remaining assets it will have as much as $16.3bn to cover the debts, which stand at around $11bn.

The company’s new reorganisation plan says almost all of its customers will get at least the total amount they lost when FTX collapsed in November 2022.

In March this year, FTX co-founder Sam Bankman-Fried was sentenced to 25 years in prison for defrauding customers and investors of the now-bankrupt firm.

“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,” said the company’s FTX’s new chief executive, John Ray.

The plan still needs to be approved by a US bankruptcy court.

FTX said it has been gathering the funds to pay its debts by selling assets investments held by Alameda Research or FTX Ventures businesses.

Alameda was a crypto trading firm controlled by Bankman-Fried.

FTX added that a jump in crypto prices since the company failed had not given its finances a major boost. It said almost all of the Bitcoin and other digital currencies believed to have been held by the exchange at the time of its collapse were missing.

The price of the biggest cryptocurrency, Bitcoin, has risen by around 270% since the firm filed for bankruptcy more than a year and a half ago.

FTX was one of the world’s largest crypto platforms before its downfall.

Bankman-Fried enjoyed celebrity status and his platform attracted millions of customers.

After reports that it was in trouble, customers withdrew billions of dollars from FTX, triggering the company’s implosion and laying bare the extent of Bankman-Fried’s crimes.

  •  deegeese   ( @deegeese@sopuli.xyz ) 
    29•6 months ago

    It’s like saying we stole your stock, and then it went up, so now we can afford to pay back what your shares used to be worth. No you cannot have the shares back, only their price from when we crashed the crypto market.

    •  biscuitswalrus   ( @biscuitswalrus@aussie.zone ) 
      4•6 months ago

      100% it’s crazy. I mined 1 btc in 2008(?) on a 9800gx2 over a bit longer than winter in Australia, and I’ve left it in a wallet and watching it flap up and down in value. This announcement was basically “crypto is up so we have enough again”. I mean selling what they must have will crash the market again surely. Or the repayment is over 36 months as they slow sell, but then they risk the value again going down.

      Don’t do crypto kids, it’s a game for traders with an appeal to people who want to self host, self sufficient, disconnected from big banks, and all that, but it was corrupted by financially motivated assholes. Therefore it became an investment/wealth vehicle and received the attention of the most morally bankrupt, manipulative people.

      Trust is what any currency that has no intrinsic valueis built on. Crypto can’t have that when the fraction of good to bad actors is skewed so heavily.

          •  Barry Zuckerkorn   ( @BarryZuckerkorn@beehaw.org ) 
            1•6 months ago

            He already did argue that, and it backfired.

            The FTX restructuring officer wrote a letter to the criminal court specifically arguing that SBF’s argument was bullshit for all sorts of reasons, and the court agreed: “A thief who takes his loot to Las Vegas and successfully bets the stolen money is not entitled to a discount on his sentence.”

            Plus that argument and a few other statements he made showed his lack of remorse, which denied him credit under the guidelines for acceptance of responsibility, and probably factored into his fairly harsh 25 year sentence.

    •  Barry Zuckerkorn   ( @BarryZuckerkorn@beehaw.org ) 
      3•6 months ago

      Yeah, FTX stole customer investments, sold them, then invested that cash in other stuff and hand out cash to executives. Some of it was traced to specific people (including SBF and his parents), and the restructuring officers clawed that back. Some of the investments paid off, some didn’t, but the end result was that there was enough to repay people based on what things were worth on the bankruptcy petition date.

        •  Barry Zuckerkorn   ( @BarryZuckerkorn@beehaw.org ) 
          1•6 months ago

          There seems to be a misunderstanding here. Who’s keeping ill gotten gains? This is like the Madoff case where the investments on paper simply didn’t exist. There are no gains, much less ill gotten gains, that aren’t being returned to victims.

          That’s like telling Madoff’s victims they get paid back in 2024 the amount they invested in the 1990s.

          No, people are getting paid based on the value of their investments at the time of the FTX collapse, not tracing back years to when they first deposited funds. That distinction makes a huge difference, especially in a case like Madoff (or the original Ponzi scheme by Charles Ponzi himself).