FTX, a defunct crypto exchange, has announced a plan to repay all its creditors with interest, according to its bankruptcy lawyers. The plan states that 98% of creditors who are owed $50,000 or less will receive at least 118% of their money back within 60 days, pending approval by a bankruptcy court. The company anticipates having between $14.5 billion and $16.3 billion available for distribution, largely sourced from previous Alameda and FTX Ventures investments.
One of the major catches in the repayment plan is that customers will be reimbursed based on the value of their cryptocurrency holdings as of November 2022, when the company went bankrupt, rather than current values. This could lead to significant differences in value, especially given the recent surge in bitcoin prices. Some FTX customers have expressed dissatisfaction with this aspect of the plan, as they believe they are missing out on potential gains.
FTX founder Sam Bankman-Fried, who was arrested in December 2022 and convicted of fraud, conspiracy, and money laundering in the fall of 2023, is currently serving a 25-year prison sentence. The jury in his case was not allowed to consider any bankruptcy activities in their decision, although the judge took into account FTX lawyers' assurance that victims would eventually recover their losses.
Overall, FTX's repayment plan offers hope to creditors, with the promise of full repayment and even additional interest. However, the reliance on 2022 crypto values for repayment has raised concerns among some customers who fear they may not receive the full value of their assets. The final approval of the plan by the bankruptcy court will determine the fate of the repayment process.