Bankrupt cryptocurrency exchange FTX has raised billions of dollars more than required to cover losses during its collapse in November 2022.
FTX CEO John Ray expressed surprise at this milestone Bloomberg’s comment, which reflects the exchange’s ability to fully reimburse its more than 2 million customers. With the upcoming sale of its assets, FTX is expected to have about $16.3 billion in cash, which will offset $11 billion of debt owed to customers and other non-government creditors. Ray said:
In any bankruptcy, this is an unlikely outcome.
While bankruptcy victims will get paid in full plus interest, court documents show equity holders are unlikely to receive any remaining balance. Depending on the type of claim, some creditors can potentially recover up to 142% of the amount they are owed. Still, most customers can receive up to 118% of their account balance at the time of filing bankruptcy.
FTX’s restructuring advisors suggested setting up a fund to compensate some creditors, using funds that would otherwise have been collected by regulatory bodies. The timeline for this initiative is not yet clear, but payments are expected to take place in the coming months.
markets react
Following news about the defunct exchange’s new asset, FTX Token (FTT) – the trading platform’s native token – surged more than 33% to $2. According to CoinMarketCap data, The cryptocurrency exchange collapsed in November 2022 amid allegations of embezzlement and misuse of billions of dollars in client funds linked to its owners and affiliated hedge fund Alameda Research.
Sam Bankman-Fried, Founder of FTX, sentenced to 25 years in prison And ordered to return 11 billion dollars. The collapse of FTX made waves in the crypto industry, with digital asset lender Genesis filing for bankruptcy shortly after causing trouble at major exchanges Gemini and. a legal battle,
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