Victims of the FTX exchange collapse founded by the now incarcerated Sam Bankman Fried will get 10 to 25% of their crypto assets back.
The new information was contained in revised bankruptcy documents that FTX creditor Sunil Kavuri shared.
Sunil explained that the document dictates that FTX creditors would receive reimbursements according to the date when the bankruptcy petition was filed.
This means that FTX creditors are expected to be paid based on the price of crypto assets when the bankruptcy petition was filed which was a lot lower.
For Context, Bitcoin is currently exchanging hands for $66,000, when FTX filed for Bankruptcy Bitcoin was at $16,000.
The decision to pay back creditors based on Petition date prices did not go down well with the FTX creditors.
“Crypto holders are not whole at petition date prices as confirmed by the debtors, the United States Department of Justice, and Judge Kaplan. Many FTX customers continue to suffer from mental distress, panic attacks, divorces, and suicidal thoughts as their life savings have been stolen and property still has not been returned.”
FTX Creditors lamented the decision while stating that the law has failed to protect them twice.
Sunil Kavuri the FTX creditor in response to all the complaints pointed out that Sam Bankman Fried violated the FTX terms of service and the broader definition of property rights by using client funds to pay outstanding debts:
“The terms of service are unambiguous that the title of digital assets is owned by the FTX customer. Sam was convicted beyond reasonable doubt for breaking the terms of service and transferring customer funds to pay off Alameda loans and buy Robinhood shares.”
Since his arrest and incarceration, SBF has made moves to repay his former clients. On Sept. 6, 2024, the FTX estate reached a deal with Emergent Technologies an entity founded by FTX founder SBF to secure the $600 million in Robinhood shares to pay off creditors.
Backstory
When FTX collapsed, its FTT native token lost 80% of its value, and $2 billion in client funds was wiped away. The man behind the FTX project went from the Forbes list of crypto billionaires to declaring for bankruptcy.
He was tried by the United States Justice system and was sentenced to 25 years in prison.
FTX partner and former head of Alameda Research Caroline Elison was recently sentenced to two years in a minimum-security prison.
What to Know
- Many Nigerians lost their funds when FTX collapsed. FTX before it collapsed was a really big brand in Nigeria and its native FTT token was widely held by Nigerian users.
- Sam Bankman Fried who was based in the Bahamas during his prime spent good money hosting huge parties and inviting celebrities. This did not help his case when his exchange collapsed.
