FTX says it will return money to most of its customers
NPR Online NewsAPR 20 2024
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.
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.
Previously FTX founder Sam Bankman-Fried was sentenced to 25 years in prison after he was convicted of stealing investors' money and funneling it into a sister company, Alameda Research, for personal business investments and political donations.
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.