FTX Exchange Raises Billions to Pay Back Customers After 2022 Collapse
In a surprising turn of events, the FTX cryptocurrency exchange has managed to raise billions of dollars more than needed to fully compensate customers who lost funds during its November 2022 collapse. With as much as $16.3 billion in cash to distribute once all assets are sold, FTX will be able to pay back the $11 billion owed to over 2 million customers and other creditors.
However, while customers will receive their full payments, equity holders may not be as lucky. US regulators and the IRS have significant claims that could potentially wipe out shareholders. FTX CEO John Ray, who took over the firm after its collapse, is now focused on monetizing the remaining value to distribute it among the claimants.
The price of creditor claims is on the rise, with some now trading at more than 100% of face value. Former FTX CEO Sam Bankman-Fried has been sentenced to 25 years in prison for allegedly funneling FTX user funds to cover debts at another company.
To build up cash reserves and pay back investors, FTX has been selling off assets. However, a judge has expressed skepticism about the exchange’s ability to fully repay customers, despite claims made by Bankman-Fried. FTX has also benefited from strong rallies in crypto tokens like Solana, which were endorsed by Bankman-Fried.
The developments at FTX have been closely watched by the cryptocurrency community and regulators alike. As the exchange works towards fully compensating its customers, the industry is waiting to see how this situation will further unfold. Stay tuned to McCreary County Record for more updates on this evolving story.
