Home US FTX Clients Set to Recover All Money They Lost in Crypto Exchange Collapse in 2022, Bankruptcy Lawyers Reveal

FTX Clients Set to Recover All Money They Lost in Crypto Exchange Collapse in 2022, Bankruptcy Lawyers Reveal

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Last month, Sam Bankman-Fried (pictured) agreed to cooperate in a class-action lawsuit against celebrities who promoted his cryptocurrency exchange.
  • FTX is willing to pay all the money investors lost, and then some
  • Defrauded investors will receive 118% of the value of their assets stored in FTX
  • The plan must still be approved by a federal bankruptcy judge.

Investors and customers of Sam Bankman-Fried’s failed cryptocurrency exchange (FTC) are set to recover all the money they lost after the company’s collapse, and then some, bankruptcy filings revealed.

FTX, which was at the center of one of the largest fraud cases in US history, will have between $14.5 billion and $16.3 billion to pay its estimated 9 million creditors and customers for the money and assets they took.

Under a federal court restructuring plan in Delaware, nearly all of FTX’s clients and investors, including hundreds of thousands of ordinary people, will receive cash payments equal to 118% of the assets they stored at FTX.

But recoveries will only be calculated based on the value of clients’ holdings in FTX at the time of its bankruptcy in November 2022, meaning clients will not benefit from the recent rise in the price of Bitcoin that led to it a record level.

The plan, which must still be approved by Judge John T. Dorsey, the federal judge overseeing the crypto exchange’s bankruptcy, would see restitution payments sent within two months.

Last month, Sam Bankman-Fried (pictured) agreed to cooperate in a class-action lawsuit against celebrities who promoted his cryptocurrency exchange.

FTX, which was at the center of one of the largest fraud cases in US history, will have between $14.5 billion and $16.3 billion to pay its approximately 9 million creditors and clients (file image)

FTX, which was at the center of one of the largest fraud cases in US history, will have between $14.5 billion and $16.3 billion to pay its approximately 9 million creditors and clients (File image)

“We are pleased to be in a position to propose a Chapter 11 plan that provides for the return of 100% of the bankruptcy claim amounts plus interest to non-government creditors,” said CEO John Ray.

In February, the struggling cryptocurrency trading platform had $6.4 billion in cash.

But the company managed to raise cash by monetizing the assets it had on hand, most of which were investments owned by Alameda Research, a cryptocurrency-focused hedge fund controlled by cryptocurrency wunderkind Sam Bankman-Fried, the companies FTX Ventures. and litigation. claims.

Last month, SBF agreed to cooperate in a class-action lawsuit against celebrities who promoted its crypto exchange.

By agreeing to cooperate with the investors, the victims will now withdraw their civil liability claims against the founding criminal.

Celebrities include some big-name sports stars such as Tom Brady, Shaquille O’Neal, Stephen Curry and Shohei Ohtani.

Brady’s ex-wife Gisele Bundchen and actor Larry David are also among the names accused of promoting unregistered securities for FTX and luring investors into a Ponzi scheme.

Almost all FTX clients and investors, including hundreds of thousands of ordinary people, will receive cash payments equal to 118% of the assets they stored on FTX.

Almost all FTX clients and investors, including hundreds of thousands of ordinary people, will receive cash payments equal to 118% of the assets they stored on FTX.

FTX founder Sam Bankman-Fried arrives at the US federal court in New York City on March 30, 2023.

FTX founder Sam Bankman-Fried arrives at the US federal court in New York City on March 30, 2023.

The lawsuit claims that crypto Bankman-Fried and the celebrities he recruited to endorse the company are responsible for around $11 billion in losses to American consumers.

Many of the stars were “ambassadors” for the commercial platform, while others appeared in prime-time commercials.

The plaintiffs hope to recover some of their losses following the collapse of FTX in November 2022.

Bankman-Fried, 32, appealed her federal conviction earlier this month after U.S. District Court Judge Lewis Kaplan imposed the prison sentence and ordered her to pay $11 billion in forfeiture. .

In exchange for removing him from the civil suit, Bankman-Fried would hand over all non-privileged documents detailing his assets and investment in artificial intelligence startup Anthropc, an affidavit certifying his net worth as negative, and documents regarding other defendants. in the broad spectrum. wide-ranging civil litigation.

Bankman-Fried also agreed to disclose any information she can about the venture capital firms that invested in FTX along with a list of accountants and lawyers who worked with the exchange.

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