Cloud Hosting

Customers of the failed cryptocurrency exchange FTX are poised to recover all of the money they lost when the firm collapsed in 2022 and receive interest on top of it, the companys bankruptcy lawyers said on Tuesday.

The announcement was a landmark in the attempt to track down the $8 billion in customer assets that disappeared when FTX imploded virtually overnight, setting off a crisis in the crypto industry. Under a plan filed in federal bankruptcy court in Delaware, virtually all FTXs creditors, including hundreds of thousands of ordinary investors who used the exchange to buy and sell cryptocurrencies, would receive cash payments equivalent to 118 percent of the assets they had stored on FTX, the lawyers said.

Those payments would flow from a pool of assets that FTXs lawyers have pulled together in the 17 months since the exchange collapsed, the lawyers said. They tapped a wide range of sources, including digital currencies that FTX still owned when it filed for bankruptcy and company assets like shares in start-ups, which could be sold to bidders.

The amount that FTX recovered is in general pretty unheard of, said Yesha Yadav, a law professor at Vanderbilt University. Thats something that is really quite astonishing for a major bankruptcy.

The plan comes with a caveat. The amount owed to customers was based on the value of their holdings at the time of FTXs bankruptcy in November 2022. That means customers wont reap the benefits of a recent surge in the crypto market that sent the price of Bitcoin to a record high. A customer who lost one Bitcoin when FTX imploded, for example, would be entitled to less than $20,000, even though a Bitcoin is now worth more than $60,000.

It will take months for the payouts to begin. The plan requires approval by the federal judge overseeing FTXs bankruptcy, John T. Dorsey. If creditors raise any objections to the plan, that could extend the timeline.

We are having trouble retrieving the article content.

Please enable JavaScript in your browser settings.

Thank you for your patience while we verify access. If you are in Reader mode please exit andlog intoyour Times account, orsubscribefor all of The Times.

Thank you for your patience while we verify access.

Already a subscriber?Log in.

Want all of The Times?Subscribe.

See the rest here:
FTX Customers Poised to Recover All Funds Lost in Collapse - The New York Times