Thursday, July 25, 2024

Failed crypto firm FTX says it owes victims more than it owes

image source, Good pictures

image caption, Sam Bankman-Fried was sentenced to 25 years in prison for defrauding clients

  • author, Joao da Silva
  • stock, Business Correspondent

Cryptocurrency exchange FTX, which has been shortened, says it owes billions of dollars more than it owes customers.

If the company sells its remaining assets, it will have $16.3bn (£13bn) to cover debts, which is around $11bn.

The company’s new restructuring plan says all of its customers will receive at least the full amount lost when FTX collapsed in November 2022.

In March this year, FTX co-founder Sam Bankman-Fried was sentenced to 25 years in prison for defrauding customers and investors of the now-bankrupt company.

“We are pleased to propose a Chapter 11 plan to recover 100% of the bankruptcy claim amount plus interest to non-government creditors,” said John Ray, the company’s new chief executive of FTX.

The plan still needs to be approved by the US Bankruptcy Court.

FTX said it is raising funds to pay off its debt by selling property investments held by Alameda Research, or FTX Ventures businesses.

Alameda was a crypto trading company controlled by Bankman-Fried.

FTX added that since the company failed, the surge in crypto prices did not provide much of a boost to its finances. It said all bitcoin and other digital currencies believed to have been held by the exchange were missing during its collapse.

FTX was one of the largest crypto platforms in the world before its downfall.

Bankman-Fried enjoyed celebrity status and his site attracted millions of customers.

After reports that it was in trouble, customers withdrew billions of dollars from FTX, sparking an implosion of the company and starkly revealing the extent of Bankman-Fried’s crimes.

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