Customers of the collapsed cryptocurrency exchange FTX can hope for full compensation for their losses. Fueled by, among other things, a rally in cryptocurrencies – including Solana, a token backed by convicted fraudster and FTX founder Sam Bankman-Fried – the company has amassed billions of dollars more than it needs to cover customers’ losses to cover the collapse in November 2022. This means they should receive a full refund of their funds plus interest. A rare outcome in bankruptcy proceedings.
FTX owes around $11 billion to its more than two million former customers and other creditors. Once the sale of all assets is complete, the company says it will have $16.3 billion in cash to distribute. “In any bankruptcy case, this is an incredible result,” said new FTX boss John Ray.
FTX’s shareholders, on the other hand, are likely to come away empty-handed, as court documents show. In a bankruptcy, under U.S. law, the owners cannot claim anything until all debts are paid in full. In the case of FTX, the US regulatory and tax authorities still have demands that are so high that no capital is likely to remain.
FTX filed for bankruptcy in November 2022 after Bankman-Fried shut down the company’s crypto trading platform and handed control over to bankruptcy experts. Bankman-Fried was later convicted of fraud.