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FTX creditors will receive 142%-118% compensation

FTX creditors will receive 142%-118% compensation

CointimeCointime2024/05/08 00:07
By:Cointime

cryptocurrency exchange FTX has accumulated billions of dollars, exceeding the amount needed to compensate customers for losses incurred during its bankruptcy in November 2022. The additional cash will be used to pay interest to the company's more than 2 million customers, a rare outcome as creditors in US bankruptcies typically receive very little. According to the company's statement, once all assets are sold, the company will have as much as $16.3 billion in cash to distribute. It owes customers and other non-government creditors about $11 billion.

According to court documents filed Tuesday evening in the federal court in Wilmington, Delaware, which is handling the FTX case, shareholders will not be left with anything, even though all debts will be fully repaid with interest.

Depending on the type of claim in the case, some creditors may receive up to 142% of what they are owed. However, most customers are likely to receive a return of 118% of what they had on the FTX platform on the day of the bankruptcy under Chapter 11 bankruptcy law.

The company is currently being run by restructuring advisers and has proposed setting up a fund to pay some creditors, including those who lent FTX cryptocurrency, or the funds will go to government regulators.

As FTX moves into the final stages of the bankruptcy case, payments may take several months to complete.

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