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FTX customers are poised to recover all of the money they lost in 2022 collapse of crypto exchange, bankruptcy lawyers reveal
Investors and customers of Sam Bankman-Fried's failed crypto currency exchange FTC are set to recover all of the money they lost following the firm's collapse, and then some, bankruptcy filings revealed.
FTX, which was at the heart of one of the biggest fraud cases in US history, will have between $14.5 billion to $16.3 billion to pay its estimated 9 million creditors and customers back for money and assets they took.
Under a restructuring plan a federal court in Delaware, almost all of FTX's customers and investors, which included hundreds of thousands of normal people, will receive cash payments equivalent to 118% of the assets they stored on FTX.
But the recoveries will only be calculated based on the value of customers' holdings in FTX at the time of its bankruptcy in November 2022, meaning customers won't benefit from a recent surge in Bitcoin's price that pushed it to a record high.
The plan, which is yet to be approved by Judge John T. Dorsey, the federal judge overseeing the crypto exchange's bankruptcy, would see the restitutions payments be sent out within two months.
Last month, Sam Bankman-Fried (pictured) agreed to cooperate in a class-action lawsuit against celebrities who promoted his crypto exchange
FTX , which was at the heart of one of the biggest fraud cases in US history, will have between $14.5 billion to $16.3 billion to pay its estimated 9 million creditors and customers back (File image)
'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,' CEO John Ray said.
In February, the distressed crypto currency trading platform had $6.4 billion in cash.
But the company managed to raise the cash by monetising the assets it had on-hand, most of which were investments owned by Alameda Research, a crypto-focused hedge fund controlled by fallen cryptocurrency wunderkind Sam Bankman-Fried, FTX Ventures businesses, and litigation claims.
Last month, SBF agreed to cooperate in a class-action lawsuit against celebrities who promoted his crypto exchange.
By agreeing to cooperate with the investors, the victims will now drop their civil liability claims against the felon founder.
The celebrities include some big name sports stars including Tom Brady, Shaquille O'Neal, Stephen Curry and Shohei Ohtani.
Brady's ex-wife Gisele Bundchen and actor Larry David are also among the names accused of promoting unregistered securities for FTX and enticing investors into a Ponzi scheme.
Almost all of FTX's customers and investors, which included hundreds of thousands of normal people, will receive cash payments equivalent to 118% of the assets they stored on FTX
FTX founder Sam Bankman-Fried arrives at the U.S. federal courthouse in New York City on March 30, 2023
The lawsuit claims crypto Bankman-Fried and the celebrities he recruited to endorse the firm are responsible for around $11 billion of losses to American consumers.
Many of the stars were 'ambassadors' for the trading platform, while others appeared in prime-time commercials.
The plaintiffs hope they might be able to recover some of their losses following the collapse of FTX in November 2022.
Bankman-Fried, 32, appealed his federal conviction earlier this month after US District Court Judge Lewis Kaplan set the prison term and ordered him to pay $11 billion in forfeiture.
In return for dropping him from the civil lawsuit, Bankman-Fried would hand over all nonprivileged documents detailing his assets and his investment in artificial intelligence start-up Anthropc, an affidavit certifying his net worth as negative and documents about other defendants in the wide-ranging civil litigation.
Bankman-Fried has also agreed to divulge any information he can about venture capital firms that invested in FTX together with a list of accountants and lawyers that worked with the exchange.