News
Bankrupt cryptocurrency firm FTX says it has more than enough to pay victims
Image source, Getty Images
Image caption, Sam Bankman-Fried sentenced to 25 years in prison for defrauding customersAbout the item
- Author, João da Silva
- Role, Business journalist
- 8 May 2024, 03:01 BST
Updated 1 hour ago
Collapsed cryptocurrency exchange FTX says it has billions of dollars more than it needs to repay customers.
The company says that once it sells its remaining assets it will have up to $16.3 billion (£13 billion) to cover debts, which amount to around $11 billion.
The company’s new reorganization plan expects nearly all of its customers to receive at least the total amount lost when FTX collapsed in November 2022.
In March of this year, FTX co-founder Sam Bankman-Fried was sentenced to 25 years in prison for defrauding customers and investors of the now-bankrupt company.
“We are pleased to be able to propose a Chapter 11 plan that provides for 100% repayment of bankruptcy claim amounts plus interest to non-government creditors,” said FTX Company’s new CEO, John Ray.
The plan still needs to be approved by a US bankruptcy court.
FTX said it raised the funds to pay its debts by selling asset investments held by businesses of Alameda Research or FTX Ventures.
Alameda was a cryptocurrency trading firm controlled by Bankman-Fried.
FTX added that the jump in cryptocurrency prices after the company’s bankruptcy did not give its finances much of a boost. Nearly all of the Bitcoin and other digital currencies believed to be held by the exchange at the time of its collapse are missing.
The price of the largest cryptocurrency, Bitcoin, has risen about 270% since the company filed for bankruptcy more than a year and a half ago.
FTX was one of the largest crypto platforms in the world before its fall.
Bankman-Fried enjoyed celebrity status, and his platform attracted millions of customers.
After it was reported to be in trouble, customers withdrew billions of dollars from FTX, triggering the company’s implosion and exposing the extent of Bankman-Fried’s crimes.