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<h2 id="key-points">Key Points</h2>
<ul>
 <li>FTX crypto exchange has billions of dollars more than needed to cover the losses of customers from November 2022.</li>
 <li>Victims could receive full recoveries and interest, Bloomberg reports note.</li>
</ul>
<p>According to the latest reports from <a href="https://www.bloomberg.com/news/articles/2024-05-07/ftx-has-billions-more-than-needed-to-repay-bankruptcy-victims?srnd=cryptocurrencies-v2&amp;embedded-checkout=true" rel="noopener noreferrer nofollow" target="_blank">Bloomberg</a>, the crypto exchange FTX has billions of dollars more than needed to cover the financial losses that customers saw back in November 2022 when the exchange collapsed.</p>
<p>Victims could be able to receive full recoveries and interest, something that is rare in US bankruptcy proceedings.</p>
<p>Usually, lower-ranking creditors only receive pennies on the dollar for their holdings. However, FTX recorded a strong rally in cryptos.</p>
<p>The exchange also sold various venture-capital projects, such as a stake in AI company Anthropic. FTX CEO John Ray, who took over the firm following its collapse, said that in any bankruptcy, this is an unbelievable result.</p>
<p>After finishing selling all assets, FTX will have about $16.3 billion in cash to distribute to the affected customers. The exchange owes customers and non-governmental creditors approximately $11 billion, according to the company’s note, cited by Bloomberg.</p>
<p>FTX’s collapse drew comparisons to Enron Corp.’s fraud-fueled downfall and also to the revealing of Bernie Madoff’s Ponzi scheme, according to the same notes.</p>
<blockquote class="twitter-tweet" data-width="500" data-dnt="true">
 <p lang="en" dir="ltr">FTX has amassed billions of dollars more than it needs to cover what customers lost in its November 2022 collapse, setting them up to receive full recoveries <a href="https://t.co/1eLlvq2oKa" rel="noopener noreferrer nofollow" target="_blank">https://t.co/1eLlvq2oKa</a></p>
 <p>— Bloomberg Crypto (@crypto) <a href="https://twitter.com/crypto/status/1788195920057708586?ref_src=twsrc%5Etfw" rel="noopener noreferrer nofollow" target="_blank">May 8, 2024</a></p>
</blockquote>
<p><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script></p>
<h2 id="nothing-will-be-leftover-for-equity-holders">Nothing will be leftover for equity holders</h2>
<p>All debts will be fully paid plus interest, but nothing will be leftover for equity holders, court documents filed this Tuesday in a federal court in Wilmington reveal.</p>
<p>FTX’s main equity holders include Thoma Bravo, Sequoia Capital, Singapore’s Temasek Holdings Pte, and Ontario Teachers Pension Plan, according to court filings from 2023.</p>
<p>The company is now run by restructuring advisers, and it also suggested setting up a fund to pay some creditors, including the ones who lent FTX crypto. The money would otherwise have gone to government regulators. The company’s assets, along with various accounts worldwide, were tracked down as well.</p>
<p>Bloomberg notes that the recoveries have seen a boost from the recovery of the crypto market, which led the price of Bitcoin to almost quadruple since back in 2022.</p>
<p>Some creditors could recover 142% of what they are owed, but the vast majority of customers will probably get 118% of what they had on the platform the day that it entered the 11th bankruptcy chapter.</p>
<p>Payouts are most likely a few months away, the same notes from Bloomberg reveal. The publication cited people familiar with the matter who said that the prospects of such massive wins are boosting the price of creditor claims. Some of them are reportedly being traded now over 100% of their face value.</p>
<p>The same claims traded for about three cents on the dollar in the FTX bankruptcy aftermath.</p>
<h2 id="the-rising-value-of-claims-mirrors-strong-crypto-market-rebound">The rising value of claims mirrors strong crypto market rebound</h2>
<p>The rising value of claims is also a reflection of the strong rebound that the crypto markets have witnessed. <a href="https://crypto.ro/en/news/bitcoin-bull-retreat-btc-price-sticks-to-62k-amidst-halving-slump/" rel="noopener noreferrer nofollow">Bitcoin</a> was priced at around $16k after FTX went bankrupt, and the digital asset is now trading at approximately $62k.</p>
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<p>Some creditors said that they are being shortchanged, even if they will eventually recover more than the dollar value of their claims.</p>
<p>Bloomberg quoted Arush Sehgal, a UK member of the FTX unsecured creditors’ committee who had over $4 million on the exchange when it collapsed. He said that he will only get 25% of his Bitcoin back, the notes report.</p>
<p>In a document that was filed this Tuesday, restructuring advisers addressed the new details of their proposal to distribute the money to creditors and end the Chapter 11 case. The document is aimed at helping creditors vote on the proposed payment plan.</p>
<p>The US Bankruptcy Judge John Dorsey will take the vote into consideration whenever he decides on whether to approve the plan during the summer of 2024.</p>
<p>FTX filed for bankruptcy back in November 2022 after SBT shut down the crypto trading platform, heading control to insolvency experts.</p>
<p>On November 2, 2023, a New York jury declared Sam Bankman-Fried, the FTX founder and former Chief Executive, <a href="https://crypto.ro/en/news/ftx-founder-sam-bankman-fried-found-guilty-in-historic-fraud-case/" rel="noopener noreferrer nofollow">guilty</a> on all seven charges of fraud related to his operation of the platform.</p>

FTX Has Billions Of Dollars Extra To Cover Customers’ Losses

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