When FTX crashed in November 2022, many of its customers were probably thinking: they wouldn’t get their money back. The cryptocurrency exchange was plunged into bankruptcy after a brief but deadly crisis triggered by the maneuvers of its founder, Sam Bankman-Fried, who is now sentenced to 25 years in prison.

A year and a half has passed since then, and people who once relied on the platform can see a glimmer of hope. The company this week filed a plan to reorganize its finances under Chapter 11 of the United States Bankruptcy Code. And he promised to pay his debts with interest.

FTX’s plan to recover the money lost by its customers

We are faced with an unusual announcement. When a company goes bankrupt, the estimated time for payments to its creditors to begin Usually five years. If all goes as expected, former users of the exchange will be able to get their assets back much more quickly, but they will still have to wait.

Submitting the plan is only the first step in reorganization. This needs to be reviewed by both the Judge (Judge John T. Dorsey in this case) and the creditors. If approved, a payment plan will be put in place that will prioritize customers and put state taxes owed in the background.

However, there are some items in the plan that may not be to everyone’s liking. The amount of money customers will receive will be calculated based on the value of their assets. When FTX went bankrupt (November 2022). This means that they will not be able to benefit from the bull run in the cryptocurrency market.

Despite the volatility in this sector, 2024 looks to be a good year for Bitcoin, which recently broke the $69,000 mark, although at the time of writing this article is trading just above $60,000. As an example, FTX clients will receive payments worth $20,000 in Bitcoin.

In any case, those affected will have lost access to their assets for several years, hence the “consensus rate” 9% interest. It will be valid from the moment the company files for Chapter 11 until the payment, which, as we said, is not known when it will happen.

Where did the money come from?

One of the biggest questions now is how FTX managed to raise the money needed to submit its restructuring plan. The company’s new management, led by John J. Ray, used various means to obtain funds, including venture investments initiated by Bankman-Fried.

The rescue maneuvers examined by authorities during the bankruptcy process involved the sale of a large amount of Solana tokens. $400 million The sale of a hedge fund called Modulo Capital and the sale of shares of companies such as Robinhood and Anthropic.

Pictures | Engin Akyurt | FTX | kanchanara

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