May 8 (UPI) — Failed cryptocurrency exchange FTX on Monday said that nearly all of its customers will get all of the money they had tied to the platform back along with additional compensation.
According to a Tuesday bankruptcy court filing, FTX said customers with claims of $50,000 or less — about 98% of all of its creditors — will get at least 118% of allowed claims in cash within 60 days of court approval of the proposed plan.
It added that other creditors would receive “100% of allowed claims plus billions in compensation for the time value of their investments.”
“Subject to being finalized and approved by the bankruptcy court, the plan contemplates the centralized 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, regardless of where the assets were located at that time,” FTX said in a Wednesday statement.
The bankruptcy plan said FTX owes an estimated $11.2 billion to defrauded customers.
It added the company has collected $14.5 and $16.3 billion by “monetizing an extraordinarily diverse collection of assets, most of which were proprietary investments held by the Alameda or FTX Ventures businesses, or litigation claims.”
“The monetization effort has been successful and the debtors currently expect to have approximately $12.8 billion in cash as of the expected effective date of the plan, enough to pay all non-governmental customers and creditors in full based on the petition date value of their claims, subject to the conditions and assumptions described in this disclosure statement,” the FTX bankruptcy court filing said.
According to the FTX statement, $24 billion in IRS claims filed before the Chapter 11 bankruptcy will be resolved “in return for a $200 million cash payment and a $685 million subordinated claim that will rank below claims of all creditors and governmental entities.”
The repayment plan includes a proposed agreement with the Department of Justice to distribute more than $1.2 billion of forfeiture proceeds to FTX customers and creditors through the Chapter 11 cases.
“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,” John J. Ray III, CEO and Chief Restructuring Officer of FTX, said in a statement.
When the FTX bankruptcy was filed in Nov. 2022 Ray vowed to effectively administer a bankruptcy plan to “maximize recoveries for stakeholders.”
Since the FTX bankruptcy was filed crypto values have soared, with Bitcoin up roughly 270%.
FTX founder and CEO Sam Bankman Fried was convicted of fraud in the FTX collapse and sentenced to 25 years in prison March 28.
According to prosecutors Bankman-Fied’s fraud victims included people who deposited retirement funds with FTX and lost their entire life savings.
At that time bankruptcy attorney Andrew Dietderich said the team leading the FTX bankruptcy estate had a strategy to repay victims of the fraud.
