In a rare and welcome surprise, defunct crypto exchange FTX will have more than enough money to fully repay customers. In court papers filed Tuesday, FTX will have $14.5 billion to $16.3 billion after liquidating its crypto holdings and other investments. Creditors are owed $11 billion. This is all thanks to John Ray III, who took the helm of FTX, of course a rally in cryptocurrency markets and the successful sale of speculative crypto projects and technology ventures. FTX entered chapter 11 with a $9 billion balance sheet hole and now will see the rare case of financial fraud that compensates its victims in full. However, not all victims will benefit from this windfall, as many asset managers purchased claims from victims for as little as 3 cents on the dollar, as some claimants were desperate for cash. More than $3 billion in claims were purchased by the likes of Oaktree Capital Management, Farallon Capital, Silver Point and others.
FTX said that almost 98% of its customers will recover 118% of their account balances, while the rest will get 100%. It will also pay 9% interest to most users, dating back to the bankruptcy filing. This is expected to be historic and one of the highest returns for creditors in a bankruptcy. US District Judge Lewis Kaplan was clear that recovery of customer money did not weight into his sentencing decision of Bankman-Fried, who has appealed his conviction sentence.
So, a spot of good news for once!
