JACKSONVILLE, Fla. Monday, May 20, 2024- Some customers of failed cryptocurrency exchange FTX could be reimbursed for their lost funds, but they won’t see any potential gains accrued since the exchange’s collapse in November 2022.1
The company’s bankruptcy plan, awaiting court approval, proposes returning the value of lost holdings at the November date.
This means customers won’t benefit from the significant price increases in cryptocurrencies like Bitcoin since then. Bitcoin, for example, has more than tripled in value.
The plan, filed by FTX’s new leadership, seeks to return 100% of allowed customer claims in cash, plus interest. However, the value of those claims is based on November 2022 prices, effectively excluding any potential gains customers might have earned had FTX remained operational.
FTX’s collapse stemmed from allegations of misuse of customer funds for risky investments. The company is currently undergoing reorganization under Chapter 11 bankruptcy protection.
The proposed plan has drawn criticism from some creditors, who argue the November valuation unfairly disadvantages them.
However, it offers a potential path for customer recovery, albeit without the benefit of the broader cryptocurrency market’s rebound.
- FTX Customers: https://www.nbcnews.com/business/business-news/ftx-customers-may-get-money-back-no-gains-crypto-price-increases-rcna151211[↩]
