FTX Gets Backlash Despite Planned Full Repayment Plus Interest
The cryptocurrency exchange FTX went bankrupt in November 2022 after a fraud-fueled collapse, leaving its users unable to access the cryptocurrency they held. FTX announced on May 7 that customers would be repaid their holdings plus interest two years after the initial collapse, but the proposed repayment plan has sparked a backlash among creditors.
The FTX repayments might offer some relief.
FTX expects the total value of property collected, converted to cash and available for distribution to be between $14.5 billion and $16.3 billion.
Around 98% of creditors with claims under $50k will get ~118% of their allowed claims… pic.twitter.com/1ltBvoZ5pt
— Oliver Isaacs (@oliverzok) May 9, 2024
FTX’s plan involves raising between $14.5 billion and $16.3 billion from selling off assets to repay creditors. Under this plan, creditors will receive $11.2 billion, resulting in a payout of up to 118% of the value of their FTX accounts as of November 2022, to compensate for the time value of their investments.
The funds to repay users will come from monetizing a collection of assets, including cryptocurrency held by the platform, proprietary investments held by Alameda or FTX Ventures businesses, and litigation claims. These assets include FTX’s 8% stake in AI startup Anthropic, which was sold to institutional investors for $884 million in March.
FTX expects to collect enough cash to pay users 100% of what they’re owed, plus interest, but there’s a catch: they’re not getting their crypto back. Instead, they’ll receive US dollars based on the value of their accounts at the time of FTX’s bankruptcy in November 2022.
My summary of the major problems with the latest FTX plan and disclosure statement at ~18m00s mark
A vote for this ABOMINATION of
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