Crypto

Failed cryptocurrency exchange FTX promises to repay its customers $9 billion

Failed cryptocurrency exchange FTX promises to repay its customers $9 billion

A deal has been made that could see FTX users see up to 90% of their crypto assets returned

FTX and FTX.US have reached a proposed settlement that would return 90% of assets to customers of the bankrupt crypto exchanges by the middle of 2024. After “extensive discussions” with the unsecured creditors’ committee, FTX debtors announced on October 17 that they achieved a “major milestone” in the Chapter 11 case with the committee comprised of non-United States customers and class action plaintiffs concerning customer property disagreements.

FTX debtors filed a notice of the settlement with a Delaware US bankruptcy court on October 16, but an official filing must be submitted by December 16 to be approved by the court.

The shortfall claim would see FTX.com pay $8.9 billion and FTX.US $166 million, which will be disbursed by the end of the second quarter of 2024 if approved by the bankruptcy court.

However, the proposal states that customers who withdrew more than $250,000 within nine days of the bankruptcy filing would have claims lowered by 15%. FTX debtors explained that amounts less than $250,000 aren’t subject to reduced claims.

“Eligible customers that have a preference settlement amount of less than $250,000 during the nine-day period would be able to accept the settlement without any reduction of claim or payment.”

However, the amended proposal says that FTX may ban any affiliates, insiders, or customers who may have known about the misuse of customer and corporate funds from the settlement.

Sam Bankman-Fried, the former CEO of FTX, is in the middle of his fraud trial related to his role in the company’s tumble into bankruptcy in November 2022.

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