16 billion US dollars collected: FTX creditors to be paid out
A year and a half after its insolvency, FTX has allegedly raised enough money to pay its creditors. This is not a rehabilitation of Sam Bankman-Fried.
Most of FTX's creditors are to receive around 118 percent of the amount owed to them by the company.
(Bild: Shutterstock.com; Sergei Elagin)
The insolvent cryptocurrency exchange FTX now has enough money to pay off its creditors - including interest. This was reported by the US financial magazine Bloomberg, citing a statement made by the company to an insolvency court. According to the statement, FTX will have over 16.3 billion US dollars after the sale of all assets, with liabilities of only 11 billion US dollars. The surprising turnaround was made possible by the recent price rally of various cryptocurrencies, including Solana, which has increased in value by more than 1000 percent since FTX's bankruptcy.
Perhaps no money lost, but profits
Most of FTX's creditors are expected to receive around 118% of the amount owed to them by the company. In some cases, however, FTX even wants to pay out up to 142 percent of the respective amount. However, it will take a few more months before this is achieved, during which various legal proceedings against the crypto exchange will be concluded. Bloomberg explains that it is extremely rare for a bankrupt company, especially one of FTX's size, to be able to pay out creditors in this way. The announcement by FTX CEO John Ray comes just weeks after the company's founder Sam Bankman-Fried (SBF) was sentenced to 25 years in prison.
Ray, who is acting as insolvency administrator, has been announcing for some time that creditors can hope for a payout. At the same time, he rejected Bankman-Fried's claim that they had not lost any money on their FTX investments and that he had not defrauded them at all. This is "callous and demonstrably false", Coindesk quoted him as saying. Just because tens of thousands of hours were spent searching through the "rubble" of FTX to gather every possible dollar, crypto coin and asset does not mean that SBF was not a criminal. After all, the payouts would be based on the prices from November 2022, and the creditors would miss out on any gains made since then.
FTX was one of the largest cryptocurrency trading platforms offering currencies such as Bitcoin. At the same time, the company had launched its own cryptocurrency called FTT. In the fall of 2022, concerns arose about the financial situation of the crypto exchange, whereupon customers began to withdraw their funds. It turned out that FTX was billions in the red and the crypto exchange imploded. Bankman-Fried was arrested in the Bahamas, where he and his confidants are said to have financed a life of luxury with customer funds. Bloomberg writes that the bankruptcy court still has to decide on the plan now submitted to pay creditors.
(mho)