OAN’s Brooke Mallory
11:35 AM – Wednesday, May 8, 2024
If a judge accepts the company’s bankruptcy plan, certain customers of the defunct cryptocurrency exchange FTX may be entitled to receive the full amount of money they lost.
Even though the value of bitcoin and other digital assets has increased significantly after the collapse of the FTX exchange in November 2022, they will not receive the profits on their holdings that have occurred over the previous two years.
In a press release on Tuesday, FTX, which is “undergoing reorganization,” stated that 98% of its creditors, including individual investors, who had $50,000 or less, will get their money back in cash within 60 days of the restructuring plan taking effect.
“The plan must still be approved by a court and by creditors,” NBC News reported.
“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 John J. Ray III, chief executive officer of FTX, whose role also serves as a chief restructuring officer.
The reorganization team’s sale of many other assets held by FTX and its sister business, Alameda Research, made that strategy viable. Among these were shares in Anthropic, the artificial intelligence startup funded by Amazon, which is currently valued at close to $20 billion.
According to FTX, the corporation has sold $900 million worth of shares this year.
However, a few claimants are against having their cryptocurrency holdings assessed at rates starting in November 2022. Bitcoin has increased by more than 250% since then.
FTX admitted that certain claimants may feel that the benefits they receive from the bankruptcy are insufficient. Although, the announcement stated that at the time of its failure, FTX was thought to hold “only 0.1% of the Bitcoin and only 1.2% of the Ethereum customers.”
FTX, which is referred to as a debtor in the bankruptcy case, has thus, “not been able to benefit from the appreciation of these missing tokens during the chapter 11 cases,” according to the press release.
“Instead, the debtors have had to look to other sources of recoverable value to repay creditors.”
Sam Bankman-Fried, the former head of FTX, was given a 25-year prison term in March for orchestrating the scam that led to the exchange’s failure.
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