On May 23, 2018, we published revised versions of our Privacy Policy and User Agreements. Please read these updated terms and take some time to understand them. Your use of our services is subject to these revised terms.
Yes, I Agree.

FTX Reveals It Has More Than Needed to Repay Victims After Collapse

The collapsed crypto exchange FTX claims to have surplus funds exceeding the amounts required for reimbursing its customers. The company states that it expects to have up to $16.3 billion after selling its remaining assets to pay down its debt, which is estimated to be approximately $11 billion.

The company’s new restructuring proposal assures nearly all of its clients will recover at least their entire losses incurred during FTX’s collapse in 2022. Earlier this year, Sam Bankman-Fried, one of FTX’s cofounders, received a 25-year prison sentence for deceiving investors and customers of the now-insolvent company.

John Ray, FTX’s new CEO, expressed satisfaction with the ability to present a Chapter 11 plan outlining the full repayment of bankruptcy claims, along with interest for nongovernment creditors. However, this proposal necessitates approval from a United States bankruptcy court.

The company disclosed that it amassed funds for debt repayment through the sale of assets and investments previously held by FTX or Alameda Research Ventures. Alameda, a cryptocurrency trading entity controlled by Bankman-Fried, was intricately linked to FTX’s operations.

Despite a significant surge in cryptocurrency prices subsequent to FTX’s collapse, the company stated that it didn’t experience a substantial financial uplift. Most of the Bitcoin and other assets purportedly held by FTX during its downfall are unaccounted for.

The value of Bitcoin has surged by approximately 270% since FTX filed for bankruptcy more than a year and a half ago. Before its demise, FTX stood as one of the world’s leading cryptocurrency platforms, enjoying widespread popularity under Bankman-Fried’s leadership.

Following reports of financial instability, FTX witnessed massive withdrawals, leading to its collapse and exposing Bankman-Fried’s fraudulent activities. This turn of events for FTX draws parallels with infamous corporate scandals such as Enron’s fraudulent collapse and Bernie Madoff’s Ponzi scheme.

The recent financial statistics underline FTX’s unexpected turn of fortune. Despite its downfall, FTX had approximately $6.4 billion in cash reserves earlier this year. It’s noteworthy that few large U.S. corporate bankruptcies have resulted in full repayment to creditors. For instance, in 2021, Hertz emerged from bankruptcy with surplus funds to compensate shareholders, owing to a surge in used-car prices. Similarly, in 2013, the parent company of American Airlines Group successfully exited bankruptcy, ensuring full repayment to unsecured creditors.

Court filings in the federal court in Wilmington, Delaware, where the FTX lawsuit is pending, state that all debts will be paid in full, including interest, but that no money would be left over for equity investors. In bankruptcy proceedings, equity holders are ineligible for payouts until all debts are settled. In this instance, claims from the IRS and regulators are substantial enough to likely exhaust any remaining assets, thereby nullifying payouts to shareholders.

The entire crypto community, including companies such as Hive Blockchain Technologies Ltd. (NASDAQ: HIVE) (TSX.V: HIVE), hope that FTX makes good on its assertion that the victims of its collapse will regain their funds as the bankruptcy process proceeds to its logical conclusion.

About CryptoCurrencyWire

CryptoCurrencyWire (“CCW”) is a specialized communications platform with a focus on blockchain and the cryptocurrency sector. It is one of 60+ brands within the Dynamic Brand Portfolio @ IBN that delivers: (1) access to a vast network of wire solutions via InvestorWire to efficiently and effectively reach a myriad of target markets, demographics and diverse industries; (2) article and editorial syndication to 5,000+ outlets; (3) enhanced press release enhancement to ensure maximum impact; (4) social media distribution via IBN to millions of social media followers; and (5) a full array of tailored corporate communications solutions. With broad reach and a seasoned team of contributing journalists and writers, CCW is uniquely positioned to best serve private and public companies that want to reach a wide audience of investors, influencers, consumers, journalists and the general public. By cutting through the overload of information in today’s market, CCW brings its clients unparalleled recognition and brand awareness. CCW is where breaking news, insightful content and actionable information converge.

To receive SMS alerts from CryptoCurrencyWire, text “CRYPTO” to 888-902-4192 (U.S. Mobile Phones Only)

For more information, please visit https://www.CryptoCurrencyWire.com

Please see full terms of use and disclaimers on the CryptoCurrencyWire website applicable to all content provided by CCW, wherever published or re-published: https://www.CryptoCurrencyWire.com/Disclaimer

CryptoCurrencyWire
New York, NY
www.CryptoCurrencyWire.com
212.994.9818 Office
Editor@CryptoCurrencyWire.com

CryptoCurrencyWire is powered by IBN

Archives

Select A Month

Official NewsWire Relationships

Anarchapulco Main Event Blockchain Africa Conference Blockchain Futurist Conference Blockchain Life Conference Blockchain Shift Coingenius Coinvention CryptoBlockCon CryptoFest European Blockchain Convention EVOLV - evolve.events Finovate nftexpoverse Paris Blockchain Week The North American Bitcoin Conference Virtual Blockchain Week The Voice of Blockchain World Crypto Conference

CryptoCurrencyWire Currently Accepts

Bitcoin

Bitcoin

Bitcoin Cash

Bitcoin Cash

Doge Coin

Dogecoin

Ethereum

Ethereum

Litecoin

Litecoin

USD Coin

USD Coin

Contact us: 212.994.9818