Rally

Customers of the defunct FTX crypto exchange find themselves at the center of a complex bankruptcy case with potentially promising outcomes.&nbsp; 
While the process has been far from smooth, the recent surge in the crypto market has bolstered the value of FTX’s assets, resulting in the possibility of customers receiving payouts that exceed their <a href="https://bitcoinist.com/binances-4-3-billion-settlement-faces-doj-scrutiny/" target="_blank" rel="noopener ">initial investments</a>. Still, there’s&nbsp;a catch for customers who have ignited discontent despite the exchange’s announcement of a full refund. 
<h2 id="ftx-customers-on-the-brink-of-recovery">FTX Customers On The Brink Of Recovery</h2> 
Following FTX’s downfall, affected customers, such as Arush Sehgal and Acaena Amoros Romero, saw their life savings vanish into the void. However, the subsequent rally in the crypto market, with FTX’s <a href="https://bitcoinist.com/crypto-exchange-ftx-16-billion/" target="_blank" rel="noopener ">asset liquidation</a> efforts and the discovery of scattered cash and crypto holdings, has transformed the bleak prospects into a potential success story.&nbsp; 
FTX’s newly appointed managers, led by Jonh Ray III, have found assets, including selling stakes in companies such as artificial intelligence (AI) startup Anthropic, to make up for losses caused by the mismanagement of FTX co-founder <a href="https://bitcoinist.com/sam-bankman-fried-turns-rat-cooperates-in-lawsuit-vs-ftx-celebrity-backers/" target="_blank" rel="noopener ">Sam Bankman-Fried’s</a> hedge fund. 
As previously <a href="https://bitcoinist.com/ftx-announces-full-customer-reimbursements/" target="_blank" rel="noopener ">reported</a>, FTX expects to amass a substantial sum, potentially reaching $16.3 billion, after selling off assets. This exceeds the approximately $11 billion owed to customers and other private creditors, leaving most of them in line to receive 118% of their original FTX account value.&nbsp; 
However, government regulators are expected to receive only a fraction of their claims, while shareholders are likely to face complete wipeout, as is standard in bankruptcy proceedings. 
The development has drawn attention as payouts surpass outcomes of other bankruptcies within the crypto space and beyond. Typically, creditors receive only a fraction of what they are owed, but FTX’s case is shaping to be an exception. The anticipated payouts, which constitute an unusually swift turnaround, are expected to commence later this year. 
<h2 id="frustrated-customers-rally-against-bankruptcy-plan">Frustrated Customers Rally Against Bankruptcy Plan</h2> 
Yet, despite the positive outlook, some FTX customers remain dissatisfied with the proposed plan. <a href="https://www.bloomberg.com/news/articles/2024-05-15/ftx-bankruptcy-will-pay-customers-over-100-but-they-missed-crypto-rally" rel="nofollow noopener" target="_blank">According </a>to Bloomberg, over 80 individuals have voiced their concerns in letters to the bankruptcy court, criticizing decisions made by FTX CEO John Ray, including the valuation of their accounts.&nbsp; 
Former creditor committee member Arush Sehgal has received support from approximately 1,500 individuals who share similar views, leading to the establishment of FTXvote—an initiative aimed at rallying opposition to the plan. 
“A hundred cents on the dollar doesn’t mean much to me,” said Sehgal, a vocal critic of how restructuring advisors have handled the case. Sehgal and Romero say they stand to recoup about $1 million, a quarter of what their account would be worth.&nbsp; 
Nonetheless, the case’s ultimate resolution will depend on the upcoming vote by FTX <a href="https://bitcoinist.com/ftx-founder-sam-bankman-fried-gets-25-years-in-jail/" target="_blank" rel="noopener ">account holders</a> and US bankruptcy judge John Dorsey’s consideration of creditor comments. 
Notwithstanding the discontent among certain customers, the bankruptcy process signifies a significant milestone in terms of the potential recovery for customers, even if not all expectations are met. 
Veno Bojanovsky, an affected customer, expressed skepticism about the outcome but chose to retain his claim rather than sell it off. 
<img loading="lazy" decoding="async" class="size-medium" src="https://www.tradingview.com/x/z7kGSBnF/" alt="FTX" width="1815" height="858"> 
The exchange’s native token, FTT, has seen a 28% uptrend in the past two weeks, resulting in a current trading price of $1.73.&nbsp; 
Featured image from Shutterstock, chart from TradingView.com

FTX Customers Express Frustration Despite 118% Payouts In Bankruptcy Case—Here’s Why

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