US government claims in FTX’s bankruptcy are expected to be negotiated down to $3 billion to $5 billion. This will leave no money for shareholders and contradict a ‘reckless and false’ claim by founder Sam Bankman-Fried that FTX’s collapse caused no harm.
FTX revealed those estimates in court documents on Wednesday. This was in response to founder Sam Bankman-Fried’s claim that he should get a <a href="https://news.todayq.com/50-year-jail-term-11b-fine-ftxs-sbf-is-doomed/" target="_blank" rel="noopener noreferrer nofollow">light prison sentence</a> because FTX is expected to repay its customers ‘in full’. In November, Bankman-Fried was convicted of stealing $8 billion from FTX customers. What does the current CEO have to say? 
According to FTX’s current CEO John Ray, Bankman-Fried distorted the company’s recent statements about its ability to repay customers in bankruptcy to argue that customers, lenders and investors suffered ‘zero’ harm.
“All of these statements are both reckless and false,” Ray wrote.
Additionally, he said, “Even the best conceivable outcome in the Chapter 11 proceeding will not yield a true, full economic recovery by all creditors and non-insider equity investors as if the fraud never happened.”
In FTX’s estimation, it will have $13.7 billion in assets to cover $31.4 billion in legitimate claims. This includes $9.2 billion in customer claims and $17 billion in claims asserted by the US Commodity Futures Trading Commission and the Internal Revenue Service.
Customers were promised full payment by FTX in January, but there was a catch. All customer claims will be valued based on the crypto price in November 2022 and if crypto prices rise significantly since that date, customers will not be rewarded. According to Ray, many FTX customers are upset with the repayment offer.
In addition to ongoing negotiations over the $17 billion in claims asserted by the US government, FTX’s bankruptcy repayment still faces significant obstacles. FTX vs. the U.S. government 
There’s a settlement in the works that will let FTX refund its customers before the government. That’d put the total government claims somewhere between $3 billion and $5 billion. The US government has agreed to prioritize customer repayment in recent crypto bankruptcies, including BlockFi and Genesis Global cases.
FTX said that if the government doesn’t prioritize its customers, the amount available to repay them will be significantly diluted.
The investors and shareholders of the comany will definitely be harmed by <a href="https://news.todayq.com/attestor-capitals-166m-bid-sparks-legal-warfare-in-ftx-saga/" target="_blank" rel="noopener noreferrer nofollow">Bankman-Fried</a>‘s fraud, as they have little hope of recovering any money from the company’s bankruptcy. The company won’t have enough money to pay shareholders, who are last in line for repayment after customers, lenders, and the government.

FTX urges US to cut bankruptcy claim, shareholders left empty-handed

Todayq News

Other articles published on Mar 22, 2024

Floki Price Prediction: FLOKI Plunges 8% As Analysts Say Consider This Solana Meme Coin For 100X ...

SWIFT proposes a role for itself in a tokenized future on a unified ledger

Newly Launched Gaming Token “SSS” Exploited; $4.6 Million Wiped off From Layer-2 Blast Network

Why This Blockchain Gaming Bull Run Is Different

Riot Platforms’ Ambitious $640M Texas Mining Project Faces Community Pushback

JPMorgan Warns of Bitcoin’s Overbought Status Ahead of Halving

Join our free newsletter for daily crypto updates!