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Snapshot 3:Tue, Oct 8, 2024 8:43:00 PM GMT last edited by MattKalman

FTC Bankruptcy Approved, Customers Will Receive Refunds

FTC Bankruptcy Approved, Customers toWill Receive Refunds

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.US Judge John Dorsey on Monday ruled that former customers of the now-defunct cryptocurrency exchange FTX will be reimbursed around 119% of the money they invested in the company 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.FTX must pay 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 said 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 canmade sure FTX could make some amends by helpingselling FTX sell those holdings and paypaying 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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