Cryptocurrency exchange FTX bankruptcy: customers to recover funds with interest

In a surprising twist, bankruptcy lawyers representing customers hit hard by the collapse of cryptocurrency exchange FTX 17 months ago have announced that victims of FTX bankruptcy won’t just get their money back — they’ll also receive extra interest on their investments.

This update comes after FTX co-founder and former CEO Sam Bankman-Fried (SBF) was found guilty of fraud, conspiracy, and money laundering six months ago.

Facing a 25-year jail term and an $11 billion fine, SBF has appealed the verdict, which could drag the legal battle on for years.

After FTX went bankrupt in late 2022, SBF stepped down, and John J. Ray III, a U.S. attorney, took over as CEO to oversee FTX’s reorganization.

Ray admitted not trusting a single document in the organization at first, but he and his team dove in to track down the missing funds, which had been shuffled into real estate, political donations, and investments.

Despite initial doubts about recovering funds, recent progress has been promising. Now, it’s been revealed that 98% of FTX creditors will get back 118% of their assets’ value in cash, while the rest will get their full investment plus compensation for lost time.

This amounts to between $14.5 and $16.3 billion in cash, including assets controlled by various entities.

While the reorganization plan needs court approval, all parties are keen to avoid lengthy legal battles.

But it’s important to note that customers won’t benefit from the Bitcoin boom that happened after FTX went bust, as the exchange had far less Bitcoin and Ethereum than customers believed.