FTX Set to Pay Almost All Customers 118% of Investments

Bankrupt crypto firm FTX announced in a new reconstruction plan filed late Tuesday that it would pay all its creditors more than they had on the platform before it went bankrupt in November 2022. The plan, however, is subject to approval by the United States Bankruptcy Court for the District of Delaware.

FTX’s restructuring team proposes to pay customers with less than $50,000, which accounts for 98% of their creditors, an extra 18% of their funds within 60 days of court approval. Also, non-government creditors will receive 100% of their funds plus “billions in compensation for the time value of their investments.”

The payments supersede the earlier 90% proposed last year, as the bankrupt firm stated it has made significant progress recovering its stolen assets. The bankrupt firm revealed that it has between $14.5 and $16.3 billion for distribution, which is more than its speculated debts of around $11 billion.

FTX to Settle Other Claims

The Sam Bankman-Fried-owned crypto firm further revealed it has a resolution with the Internal Revenue Service (IRS) over its $24 billion claims. The IRS agreed to forfeit its claims for a $200 million cash payment and $685 million subordinated claims, which FTX will pay after making customers and governmental entities whole.

The FTX restructuring team also revealed it reached an agreement with several other governmental and private shareholders without “costly and protracted litigation.” The resolutions involved those with the Commodities Futures Trading Commission (CFTC) and the US Department of Justice (DOJ).

Tongues Wag, Regardless

Despite the increment from the initial customer claim settlements, comments have continued to rain in concerning the payment clause that allowed FTX to repay clients using the prices of their assets pre-bankruptcy.

In an X post, the CEO of BitGo slandered the FTX restructuring team’s claims that customers were getting more than 100% of their funds.

0% of FTX creditors agree that receiving $16800 for your bitcoin is fully compensated.

I understand why the bankruptcy process needs to work this way but let's not pretend victims are getting their money back or that FTX wasn't as awful as it was. https://t.co/odVp4rT7hP

— Mike Belshe (@mikebelshe) May 8, 2024

Since FTX’s bankruptcy, Bitcoin has risen over 270%. Coins like Solana, which is one of the exchange’s largest holdings, have also grown over 1,000%.