FTX claims it can compensate "118% of complaints".. But!

FTX announced the implementation of a plan which will finally make it possible to repay almost all creditors. So the majority of them will get 100% of their money back, while others will likely receive a bonus.

FTX begins compensation procedures for all customers... but!

After more than 17 months under Chapter 11 protection in Delaware County, FTX and its debtors have filed various documents, including Reorganization planin the United States Bankruptcy Court.

According to the plan presented by the bankruptcy administration of the stock exchange, customers who were victims of the financial crime committed by Sam Bankman Freed (SBF) will be compensated approximately.

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Debtors boast of being able to pay up to “118% of authorized claims” to 98% of creditors. Even John J. Ray III, the CEO appointed to oversee the restructuring, praised the supposedly positive outcome.

Try John J. Ray III justified his findings by explaining the complexity of the process, given that at the time of the bankruptcy, FTX held only 0.1% of the Bitcoin and 1.2% of the Ethereum that it was supposed to reserve for its customers.

“We are pleased to be able to propose a Chapter 11 plan that provides for the return of 100 percent of the bankruptcy claim amounts, plus interest, to non-governmental creditors.”

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In fact, it is worth remembering that what has been defined as 100% "plus interest" claims would only be applauded by someone unfamiliar with the history of events, since it was announced to creditors that they would be compensated up to the monetary value of their claims. active at the time FTX Bankruptcy In November 2022. At that time, Bitcoin (BTC) was trading at around $17,000 compared to more than $62,000 today... And we will not forget that the bankruptcy of this exchange is what led to the price towards this lowest in the first place!

Thus, 98% of FTX creditors will receive at least 118% of approved claims in cash within 60 days of their effective date. Other creditors will receive 100% of approved claims, plus interest for non-governmental creditors.

Finally, it is expected that between 14.5 and 16.3 billion dollars will be redistributed between... FTX Creditors. This recovery of funds became possible thanks to the monetization of Alameda and FTX assets, but cryptocurrency exchanges have learned the importance of self-custody of their currencies, after investigations revealed that neither Sam Bankman-Fried, neither Caroline Ellison nor anyone at the stock exchange really knew where the funds were at the time of his bankruptcy.