Ftx Expects To Repay Customers In Full Bankruptcy Lawyer Say
BloombergJan 31
FTX Will Repay Billions, Won't Revive Company
The Facts
Cryptocurrency exchange FTX on Wednesday announced it won't rebuild the company and will instead liquidate all assets and use the funds to repay customers who lost money after FTX's Nov. 2022 bankruptcy. Company lawyer Andy Dietderich said FTX has already recovered $7B in lost assets.
FTX, whose founder and former Chief Executive Officer Sam Bankman-Fried was convicted of fraud in federal court last year, previously reported having 36K claims adding up to roughly $16B. Last year, though, it said it would only be able to repay 90%.
The Spin
Pro-establishment narrative
This announcement is a win for the victims of the FTX scam. The law clearly states that debtors must receive compensation based on the date of bankruptcy. The government has convicted these fraudsters and forced them to find the money to repay their customers. Plus, Bankman-Fried will probably wind up behind bars.
Establishment-critical narrative
The potential for victims to recoup some funds shouldn't overshadow that Alameda Research was also linked to multiple sketchy banks whose business dealings seem to have been conveniently overlooked by regulators. There must be as much scrutiny of the corporate-government cooperation in this case as there has been of Bankman-Fried.
Nerd narrative
There's a 50% chance that Bankman-Fried will be sentenced to at least 287 months in prison before Jan. 1, 2026, according to the Metaculus prediction community.