Customers who patronised the collapsed cryptocurrency exchange FTX, have been told to expect a recovery of the money they lost when the company went bankrupt in 2022, and with interest.
Lawyers of the firm gave the assurance on Tuesday, as efforts are being made to track down the missing $8 billion in customer assets when FTX imploded virtually overnight and triggered a crisis in the crypto market.
The lawyers explained that a plan was filed in the federal bankruptcy court in Delaware and would provide FTX’s creditors, including hundreds of thousands of ordinary investors who used the platform to buy and sell cryptocurrencies, with cash payments equivalent to 118 per cent of the assets they stored on FTX.
They added that the payments would come from a pool of assets the lawyers pulled together in the 17 months since the exchange collapsed, including the digital currencies still owned by FTX when it filed for bankruptcy while the company assets such as shares in start-ups, might be sold to bidders.
However, the amount the company owed customers was based on the value of their holdings when FTX went bankrupt in November 2022, depriving customers from benefiting from the recent surge in the crypto market that sent the price of Bitcoin to a record high.
Meanwhile, the payments will take months before taking effect, as the plan will need to be approved by the federal judge, John T. Dorsey, who is overseeing the company’s bankruptcy. It’s hoped that objections against the plan are not raised as that could extend the timeline.
