FTX says it will return money to most of its customers
NPR Online NewsMAY 12 2024
A US Judge John Dorsey ruled Monday that former customers of the now-defunct cryptocurrency exchange FTX will be reimbursed around 119% of the money they had hunder the company's management before it went bankrupt in 2022.
The ruling means that FTX must pay a total of up to $16.5B in reimbursements, covering an estimated 98% of customers who held $50K or less in their accounts at the time of the bankruptcy. FTX says its goal is to pay between $14.7B and $16.5B.
The company, whose founder Sam Bankman-Fried has been sentenced to 25 years in prison for stealing customer's investments, was convicted of funneling the money into its sister company, Alameda Research, for personal business investments and political donations.
While in a perfect world, customers would receive compensation with full interest, this settlement is certainly better than nothing. By putting a good chunk of the stolen money into valuable assets, FTX can now sell those and pay back most of its victims at 9% interest. Most bankruptcy cases wouldn't force the company to pay any compensation, so this is a lucky deal.