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FTX seeks approval to repay customers in cash
Bankrupt cryptocurrency exchange FTX is set to ask permission to repay customers in cash.
As Reuters reported on Tuesday (June 25), the company will ask a judge to allow its customers to vote on a liquidation plan this would allow cash refunds, despite protests from some customers who feel cheated.
From his bankruptcy declaration in 2022, FTX’s new management managed to recover $16 billion to repay customers and said it intended to repay them in full. At a hearing on Tuesday, the company will ask U.S. Bankruptcy Judge John Dorsey to approve an open vote on the company’s liquidation plan.
FTX said its reorganization plan would give 98% of creditors 118% of their claims – in cash – within 60 days of court approval.
“FTX achieved this level of recovery by monetizing an extraordinarily diverse collection of assets, the majority of which were proprietary investments held by Alameda or FTX Ventures businesses, or lawsuits,” the company said last month.
Alameda is a reference to Alameda Research, the FTX sister company at the center of the exchange’s collapse.
However, some FTX customers say yes he should be paid morestating that the company is basing its repayment plan on cryptocurrency prices since the exchange went bankrupt in the fall of 2022. Since then, the price of bitcoin, the most popular cryptocurrency, has increased.
Under the plan, customers who had bitcoin deposited on FTX when it went bust will receive about $16,800 in cash, with the bitcoin worth nearly $60,000 as of Tuesday morning.
Last week, a group of customers asked a judge to rule on the matter $8 billion of the company’s confiscated assets belong by right.
Lawyers for these clients, Adam Moskowitz and David Boies, said in a court filing that the bankruptcy process has left “FTX’s clients feeling ‘offended and robbed,’ many of whom view the bankruptcy process as a ‘second act of theft’ and that the “FTX bankruptcy estate continues to be the same fraudulent corporate entity” as the SBF-managed enterprise was.
“SBF” refers to former FTX CEO Sam Bankman-Fried, who was convicted and sentenced to 25 years in prison for fraud linked to the stock market collapse.
“If not for the crimes for which SBF was convicted, namely the theft and misuse of client assets, clients would have owned their cryptocurrency investments today,” the statement read.