FTX says customers will be repaid for losses
Customers of failed cryptocurrency platform FTX will be made whole on the assets they lost when the company collapsed in 2022, it announced on Wednesday. The plan "contemplates the centralised distribution to customers and other creditors around the world of virtually all of the assets associated with FTX at the time of its collapse in November 2022," said a statement released by FTX Trading LTD. Total distributions to customers will be between US$14.5-US$16.3 billion. FTX said the plan still must be approved by a Delaware bankruptcy court. "We are pleased to be in a position to propose a chapter 11 plan that contemplates the return of 100 percent of bankruptcy claim amounts plus interest for non-governmental creditors," said John Ray III, chief executive and chief restructurings officer of FTX. FTX said it garnered the funds "by monetising an extraordinarily diverse collection of assets," mostly investments held by the company and affiliates and litigation claims. Another factor was the resolution of claims against the firm, including some US$24 billion that had been sought by the Internal Revenue Service for the period prior to the Chapter 11 filing. To resolve the IRS cases, FTX will instead pay US$200 million in cash and US$685 million to be paid out after other claims. The plan also will pay out interest of up to nine percent, FTX said. What won't be included will be the appreciation in value that bitcoin and other cryptocurrencies have enjoyed since November 2022. FTX collapsed suddenly following a deluge of customer withdrawals. The company's chief architect, Sam Bankman-Fried was sentenced in March to 25 years in prison following a conviction of fraud and other financial crimes. (AFP)