- 1 FTX announced that it will repay the complete claims of creditors and customers as bankruptcy claims.
- 2 The creditors want the bankruptcy court to value their claims as per the current asset values.
- 3 FTX does not plan to re-establish the exchange, as it was rumored and believed previously.
FTX claims to repay customers and creditors in full. A Delaware bankruptcy court has conveyed this to an attorney for debtors of the failed crypto exchanges. Lawyer Andrew Dietderich, representing FTX, said that the exchange expects to have sufficient funds to pay all the eligible customers and creditors in full.
What will FTX do?
The exchange aims to compensate customers based on the cryptocurrency price as of November 2022. The date is linked to the day when FTX filed for bankruptcy. However, the customers are asking for claims as per the real-time trading prices rather than the previous day.
The exchange is still facing some challenges associated with getting the lost funds back to customers, as Dietderich notes that the company will need to review all the claims to determine whether the claims are legitimate or not.
The company does not guarantee all payments immediately, as they have to work on the various risks and payments. Still, they are chasing the objective of repaying and compensating all the customers with sincerity and strategy. However, the management has not revealed their payment strategy yet.
“I would like the court and stakeholders to understand this not as a guarantee, but as an objective. There is still a great amount of work and risk between us and that result, but we believe the objective is within reach, and we have a strategy to achieve it.”
Reboot of the Exchange
He added that the company is no longer planning to re-establish the FTX exchange. It was rumored last year that the company would restructure the exchange and launch it again in practice.
It clarifies that the business was doing alright but only a single man was responsible for all the mishaps. Dietderich mentions,
“This hopefully puts to bed the alternative narrative that this business was just fine all along, It was an irresponsible sham, created by a convicted felon.”
Details of the Claim
At the time of the bankruptcy filing, FTX reported a count of 36,000 claims and the total value of the claims was $16 billion. In 2023, the board said that they would be able to compensate 90% of the total number of customers. However, as per the recent update, 100% of the customers will be repaid.
FTX was recognized as one of the largest crypto exchanges but collapsed in November 2022. It occurred due to the malpractices of founder and former CEO Sam Bankman-Fried. As a result, he was arrested and expelled from the company.
As an update on the case, he was found guilty last November. There are multiple cases filed against him, including those against his parents. Users expect to file more clawback claims this year.
Anurag is working as a fundamental writer for The Coin Republic since 2021. He likes to exercise his curious muscles and research deep into a topic. Though he covers various aspects of the crypto industry, he is quite passionate about the Web3, NFTs, Gaming, and Metaverse, and envisions them as the future of the (digital) economy. A reader & writer at heart, he calls himself an “average guitar player” and a fun footballer.