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Snapshot 2:Tue, Oct 8, 2024 8:23:37 PM GMT last edited by Brian

FTC Bankruptcy Approved, Customers to Receive Refunds

FTC Bankruptcy Approved, Customers to Receive Refunds

Above: In this photo illustration a FTX logo is displayed on a smartphone with stock market percentages in the background. Image copyright: Omar Marques/Contributor/SOPA Images/LightRocket via Getty Images

The Facts

  • 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 Spin

In a perfect world, customers would receive compensation with full interest, but this settlement will at least be better than nothing. By putting a good chunk of the stolen money into valuable assets, Sam Bankman-Fried can make some amends by helping FTX sell those holdings and pay back most of its victims at 9% interest.

While it's true that something is better than nothing, and that bankruptcies usually result in zero compensation, it's inaccurate to claim customers are being 100% compensated. If FTX didn't outright steal people's property and use it to fund Sam Bankman-Fried's lavish lifestyle, many of these victims would be enjoying incredible profits right now.


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