Bitcoin
Failed Crypto Firm FTX Says It Has More Than It Needs to Pay Victims
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Image caption Sam Bankman-Fried was sentenced to 25 years in prison for defrauding customersArticle information
- Author, João da Silva
- Function, business reporter
- May 8, 2024, 03:01 BST
Updated 1 hour ago
Bankrupt cryptocurrency exchange FTX says it has billions of dollars more than it needs to refund customers.
The company claims that, after selling its remaining assets, it will have up to $16.3 billion (£13 billion) to cover debts, which are worth around $11 billion.
The company’s new reorganization plan says that almost all of its clients will receive at least the full amount they 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 the now-bankrupt company’s customers and investors.
“We are pleased to be able to propose a Chapter 11 plan that contemplates the return of 100% of bankruptcy filing amounts plus interest to non-governmental creditors,” said the new chief executive of the company FTX, John Ray.
The plan still needs to be approved by a US bankruptcy court.
FTX said it has been raising funds to pay its debts by selling investments in assets held by Alameda Research or FTX Ventures.
Alameda was a crypto trading company controlled by Bankman-Fried.
FTX added that a jump in cryptocurrency prices since the company’s bankruptcy has not given its finances a major boost. He said almost all of the Bitcoins and other digital currencies believed to have been held by the exchange at the time of its collapse were missing.
The price of the largest cryptocurrency, Bitcoin, has increased by around 270% since the company filed for bankruptcy more than a year and a half ago.
FTX was one of the biggest crypto platforms in the world before its fall.
Bankman-Fried enjoyed celebrity status and his platform attracted millions of customers.
After reports that it was in trouble, customers withdrew billions of dollars from FTX, triggering the company’s implosion and revealing the extent of Bankman-Fried’s crimes.