Gary

Bahamas

Steve

Beleagured crypto exchange, FTX has received court approval to fully repay customers from its recovered assets worth $16.5 billion following its <a href="https://www.wired.com/story/the-fallout-of-the-ftx-collapse/" target="_blank" rel="noopener">bankruptcy</a> in November 2022 
The plan, approved by U.S. Bankruptcy Judge, John Dorsey, is built on a series of settlements with U.S. government agencies, customers, creditors and liquidators who have been appointed to process its external operations&nbsp; 
Recall that FTX collapsed in 2022 following news that the founder, Sam Bankman-Fried, took funds belonging to customers to pay off risky bets made by his hedge fund, Alameda Research. This is an offence for which he has in March 2024 been sentenced to 25 years in prison. 
The bankruptcy exchange company has estimated that it will have between $14.7 billion and $16.5 billion to repay creditors which is enough to pay customers at least 118% of the value in their accounts as of November 2022 when the company filed for bankruptcy. 
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As part of the court ruling, FTX was granted permission to use its assets to pay customers off before paying competing claims filed by government regulators. The crypto company plans to repay 98% of its customers, especially those who hold $50,000 or less on the exchange within 60 days after the plan’s effective date. 
Similarly, the company has been in talks with the country’s Department of Justice on the $1 billion seized during the trial and prosecution of Bankman-Fried. In place of this, funds up to $230 million will be received by shareholders as per the court documents where they wouldn’t have originally received any funds in a normal bankruptcy proceeding. 
In a statement released by FTX following the court ruling, the CEO, John Ray gave credit to everyone who made the liquidity recovery possible throughout the chaotic period of the company. 
“Today’s achievement is only possible because of the experience and tireless work of the team of professionals supporting this case, who have recovered billions of dollars by <a href="https://www.reuters.com/technology/ftxs-new-ceo-assesses-exchanges-failings-2022-11-17/" target="_blank" rel="noopener">rebuilding FTX’s books</a> from the ground up and from there marshalling assets from around the globe,” CEO John Ray said in a statement on Monday. 
The company raised additional funds by selling off a couple of assets which includes its investment in tech organizations such as the <a href="https://www.reuters.com/technology/crypto-exchange-ftx-sell-shares-ai-startup-anthropic-2024-02-22/" target="_blank" rel="noopener">artificial-intelligence startup Anthropic</a>. 
Customers have had a mixed response to the plan, with many expressing disappointment that FTX’s demise caused them to miss out on a strong rebound in crypto prices since the market bottomed out in 2022. Some customers had objected to the plan, demanding higher repayments reflecting recent rises in cryptocurrency values. 
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FTX said it was not possible to simply return the crypto assets customers had deposited, because customers’ assets were gone, misappropriated by Bankman-Fried. 
At the time of its bankruptcy filing, FTX.com held only 0.1% of the bitcoin that its customers believed they had deposited on the exchange, according to the company. One of FTX’s financial advisers, Steve Coverick, testified on Monday that it would be “exorbitantly expensive” to purchase billions of crypto assets on the open market to repay customers with the same types of cryptocurrency they had before the bankruptcy. 
Read also: <a href="https://technext24.com/2024/09/25/ftx-caroline-ellison-sentenced-2-years/">FTX Fraud: Alameda’s former CEO, Caroline Ellison sentenced for 2 years, to forfeit $11bn</a> 
<h4 id="ftx-legal-history" class="wp-block-heading">FTX legal history</h4> 
After the collapse of FTX in November 2022, <a href="https://en.m.wikipedia.org/wiki/Royal_Bahamas_Police_Force" target="_blank" rel="noopener">the&nbsp;Royal Bahamas Police Force</a>&nbsp;launched a criminal investigation into the company. 
The&nbsp;United States House Committee on Financial Services&nbsp;announced it plans to conduct hearings in December on the collapse of FTX, and committee leaders said they would seek testimony from Bankman-Fried. Some venture capital firms were also considering suing him. 
FTX founder and CEO Sam Bankman-Fried was charged in December 2022 by the US attorney’s office for the southern district of New York with crimes such as fraud, conspiracy to commit money laundering, and conspiracy to defraud the US and violate&nbsp;campaign finance&nbsp;laws.&nbsp; 
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After extraction from the Bahamas, Bankman-Fried was released on a $250&nbsp;million bond and ordered to remain under house arrest at his parents’ home in&nbsp;Palo Alto, California. He was later on January 3, 2023, arraigned in federal court, in Manhattan where he entered a plea of not guilty to all counts. His trial date was again set to October 2, 2023. 
Asides, several FTX leaders such as Gary Wang, co-founder of FTX,&nbsp; Caroline Ellison, who served as Alameda’s CEO and Nishad Singh, FTX’s former engineering director, had pleaded guilty to charge counts. Ryan Salame, a former executive&nbsp;also pleaded guilty to both charges of campaign finance law violation and operating an unlicensed money-transmitting business. 
In August 2024, the company was ordered by a US court to pay $12.7 compensation to former customers and fraud victims. This has been tagged the “largest such recovery” in the history of the <a href="https://en.m.wikipedia.org/wiki/Commodity_Futures_Trading_Commission" target="_blank" rel="noopener">Commodity Future Tradings Commission</a>.
The post <a href="https://technext24.com/2024/10/08/ftx-court-approves-customers-refund/">Court approves FTX plan to refund customers, creditors $16.5 billion</a> first appeared on <a href="https://technext24.com">Technext</a>.

Court approves FTX plan to refund customers, creditors $16.5 billion

Technext.ng

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