Most customers of the bankrupt crypto exchange will reportedly receive full refunds, according to FTX

A recent court filing reveals that nearly all clients affected by the collapse of the cryptocurrency exchange FTX will not only receive their funds back but may also receive additional compensation.

FTX’s reorganization plan, disclosed on Tuesday, suggests the exchange owes creditors roughly $11.2 billion, while having between $14.5 billion and $16.3 billion available for distribution.

According to the plan, customers with claims totaling $50,000 or less will receive approximately 118% of their allowed claim, benefiting around 98% of creditors.

Pending approval by the Bankruptcy Court, this plan offers potential relief to FTX customers who have had their funds held since the exchange’s bankruptcy filing in November 2022.

In early November, FTX’s prominent founder, Sam Bankman-Fried, was found guilty of seven criminal charges, including allegations of embezzling billions from FTX’s users, resulting in a 25-year prison sentence.

FTX managed to raise funds by selling various assets, including venture investments held by the exchange and other holdings from Alameda, Bankman-Fried’s crypto hedge fund.

One notable investment by FTX was in Anthropic, an artificial intelligence firm backed by Amazon. FTX sold most of its stake in Anthropic this year, generating close to $900 million.

Due to a substantial amount of cryptocurrency missing from the exchange, FTX had to explore alternative avenues for raising capital.

FTX expressed in a recent press release that they were unable to capitalize on the soaring crypto prices since November 2022 due to the ongoing chapter 11 proceedings, opting to seek value elsewhere to settle debts.

Following Bankman-Fried’s resignation, John Ray III was appointed as CEO. Ray, with four decades of legal and restructuring expertise, remarked on the unprecedented failure of corporate oversight and lack of reliable financial data at FTX.

Ray expressed satisfaction with the proposed chapter 11 plan, which aims to reimburse non-governmental creditors fully, including interest, highlighting the company’s commitment to resolving its financial obligations.

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