-
FTX will pay back 98% of creditors at least 118% of what they’re owed, its bankruptcy lawyers said.
-
The company forecasts between $14.5 billion and $16.3 billion will be available for distribution.
-
But payments will be based on 2022 crypto values, not what assets are worth now amid price surges.
FTX will pay back all its creditors — with interest — lawyers for the defunct crypto exchange vowed Wednesday in a plan to take it out of bankruptcy.
Ninety-eight percent of FTX’s creditors — who are owed $50,000 or less — will receive at least 118% of their money back within 60 days, according to the plan, which must first be approved by a bankruptcy court.
FTX predicts it will have between $14.5 billion and $16.3 billion available for distribution — mostly from previous Alameda and FTX Ventures investments, bankruptcy lawyers said.
In March, for instance, FTX’s bankruptcy estate sold a majority of its shares in the artificial-intelligence startup Anthropic for $884 million — after paying $500 million for the stake back in 2021.
But there’s a brutal catch to the paybacks.
Business Insider’s Jacob Shamsian previously noted FTX customers will be repaid based on what their cryptocurrency holdings were valued in November 2022, which is when the company went under — not what the crypto would be worth today.
That could mean a huge difference in value, given bitcoin’s recent surge.
And some FTX customers aren’t happy.
Bloomberg reported in January that more than 80 people had filed letters over the plan, complaining that they’re missing out on bitcoin’s skyrocketing value.
The FTX founder Sam Bankman-Fried was arrested in January 2023 and convicted last fall of fraud, conspiracy, and money laundering.
The jury was not allowed to consider any bankruptcy activities in rendering its verdict — though the judge factored into his sentencing that FTX lawyers said victims would recover their losses.
Bankman-Fried is serving a 25-year prison sentence.
Correction: May 8, 2024 — An earlier version of this story misstated the month that Sam Bankman-Fried was arrested. It was December 2022, not January 2023.
Read the original article on Business Insider