FTX Customers Set to Recover $9B by End of Q2 2024

Jimmy Aki
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The customers of bankrupt crypto exchanges FTX global and FTX.US are set to recover about 90% of their total assets following a new set of agreements.

FTX.com Customers to Get $8.9B

In an October 17 tweet, FTX debtors announced they had reached a “major milestone” in their bankruptcy discussions. This progress came after a series of meetings with the defunct crypto exchange’s committee of creditors – a group of creditors outside the US – and aggrieved customers who filed a class action lawsuit against

Given this, the new terms of agreements would enable FTX global and FTX.US customers to access 90% of their assets scheduled for distribution by the end of the second quarter of 2024.

According to the terms of the new agreement, the shortfall claim would see customers of FTX.com get $8.9 billion, and FTX.US customers snap up the remaining $166 million.

To ratify the deal, FTX debtors filed a notice on October 16 to the Delaware-based US bankruptcy court. However, an official filing is expected by December 16.

If the bankruptcy court gives the green light, FTX customers will get the full amount of new agreements.

However, there is a growing consensus amongst all parties involved that impacted customers will not have full access to their lost funds and will have to settle with the amended plan.

Early Withdrawals Will Attract 15% in Asset Slash.

Speaking on the new direction the crypto exchange has turned, chief restructuring officer and CEO of FTX John J. Ray III said the amended plan was more inclusive, and he was pleased with it.

Commenting further, Ray III said that the collaborative efforts of debtors and creditors had created enormous value in a situation that could have seen both parties suffer total losses.

While the amended plan is a welcome development, there is a clause in how settlements will be paid. According to the amended plan, the digital assets to be paid will be split into three pools.

This will devolve into assets created for the benefit of FTX.com customers, US-based customers, and a general pool of assets. The growing belief is that only the first two groups would see their requests honored.

More details also state that FTX customers who withdrew more than $250,000 within nine days when bankruptcy claims started would see their overall claims slashed by 15%.

However, eligible customers with preference settlements below the $250,000 benchmark during the nine-day bankruptcy period would not have their claims or payments slashed.

In addition, the new terms of agreements would completely exclude the centralized crypto exchange’s insiders, affiliates, and customers. This exclusion pertains to those privy to the misuse of customers’ deposits and the exchange’s treasury funds before its collapse in November 2022.

Damning Testimony By FTX’s former Head of Engineering

Former FTX CEO and founder Sam Bankman-Fried (SBF) is currently on trial for charges spanning fraudulent activities and misuse of customers’ funds.

So far, key witnesses like former Alameda Research (FTX’s venture capital arm) Caroline Ellison have been called to testify.

However, recent testimony from co-founder and head of engineering Nishad Singh has also painted a bad picture of the defendant running the one-time fifth-largest Bitcoin trading platform.

According to Singh, SBF lived a luscious lifestyle and specifically mentioned his insistence on purchasing a $35 million Orchid penthouse even though a cheaper option was available.

Singh also stated that SBF allegedly attempted to mislead authorities like the Commodity Futures Trading Commission (CFTC) on the exchange’s operations by asking his subordinates to move Serum tokens into Alameda Research’s balance sheet.

About Jimmy Aki PRO INVESTOR

Based in the UK, Jimmy is an economic researcher with outstanding hands-on and heads-on experience in Macroeconomic finance analysis, forecasting and planning. He has honed his skills having worked cross-continental as a finance analyst, which gives him inter-cultural experience. He currently has a strong passion for regulation and macroeconomic trends as it allows him peek under the global bonnet to see how the world works.