FTX, the bankrupt cryptocurrency exchange that was run by Sam Bankman-Fried, said it expects to fully repay its customers, according to a court hearing.
However, the full recovery of customer assets is – unfortunately for those waiting for their money – based on the point of FTX’s actual bankruptcy, when the markets were already in turmoil. That date was preliminarily approved by U.S. Bankruptcy Judge John Dorsey, and it's a point of contention for some claimants.
Bitcoin’s price has rebounded to more than $43,000 as of publication time, up 110% from its price of roughly $20,500 at around the time of FTX’s collapse in early November.
“Many of those claims are premised upon currencies which declined dramatically in value in that tumultuous period leading up to the petition date,” FTX Creditor Committee lawyer Kris Hansen said Wednesday during the hearing.
The repayment process under consideration in the U.S. bankruptcy court would require claimants to submit proof they held, and subsequently lost, assets on FTX, which will be vetted by restructuring advisers, said FTX lawyer Andrew Dietderich. The defunct exchange has shifted its focus to making its former clients whole as it abandons its plans to relaunch its platform due to a lack of buyers, according to the court proceedings.
Today's efforts in court were aimed at pushing the case forward by allowing several camps of creditors to clinch approvals from individual investors to approve this latest approach to getting their money back. Roughly 15 million people lost a combined $30 billion to $35 billion worth of various cryptocurrencies in the wake of FTX's implosion, as of last fall, according to data from bankruptcy claims exchange Xclaim.
FTX's native token FTT surged more than 11% just after the news on the company's plans, but it quickly fell sharply and is down about 15% for the day on Wednesday.
Bankman-Fried was found guilty last year of pilfering customers' money before it collapsed in late 2022.
UPDATE (January 31, 2024, 20:18 UTC): Adds details and comments from bankruptcy hearing.
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