Nearly All FTX Creditors Will Get 118% of Their Funds Back in Cash

[The Hidebehinder]

From coindesk:
https://www.coindesk.com/policy/2024/05/08/nearly-all-ftx-creditors-will-get-118-of-their-funds-back-in-cash-estate-says-in-new-plan/

Bankrupt cryptocurrency exchange FTX has proposed a new reorganization plan that would see a whopping 98% of its creditors get back 118% of their claims – in cash – within 60 days of court approval, according to new documents filed Tuesday evening.
Under the plan, other non-governmental creditors would get back 100% of their claims plus up to 9% interest to compensate them “for the time value of their investments.” The arrangement is still subject to approval by the Delaware bankruptcy court overseeing the bankruptcy case.
The proposed payouts are higher than earlier estimates from the FTX estate, which said in October it expected to pay back only 90% of customer funds. In January, current FTX CEO John Jay Ray III revised that estimate, telling the court he expected to be able to pay customers back in full.

In a Tuesday press release, the FTX estate said it expects to have between $14.5 and $16.3 billion in cash available for distribution by the time a plan is approved by a Delaware bankruptcy court – the result of a year-and-a-half of scraping together the company’s scattered assets around the world and liquidating them.

If they have 16 billions in cash, and this is from sold coins probably at a profit of over 200% if not 300%, that would still mean FTX had close to 5 billion in coins when it went bankrupt so how did they end bankrupt with that amount of coins? 118% in cash probably $ is well below 100% in coins, I think a bit over half of that but I am surprised at the amounts recovered, wasn't FTX supposed to not have a single penny left and this is why it went down?

[Fiatless]

If they have 16 billions in cash, and this is from sold coins probably at a profit of over 200% if not 300%, that would still mean FTX had close to 5 billion in coins when it went bankrupt so how did they end bankrupt with that amount of coins? 118% in cash probably $ is well below 100% in coins, I think a bit over half of that but I am surprised at the amounts recovered, wasn't FTX supposed to not have a single penny left and this is why it went down?

This is good news and I commend the management of FTX led by CEO John Jay Ray III. He and his management team have been able to manage the estate effectively which will make depositors recover their funds with interest. I think the recent price increase in the crypto space also contributed to the high revenue the firm has made. Most customers lost the opportunity to make more money but they should be pleased that they will get back their money. It took many years for Mt. Gox victims to get back their funds, so there is an improvement in the recovery and disbursement system. I hope that Delaware bankruptcy court will approve this arrangement. 

[alastantiger]

My uncle who at the time was one of their clients and is a victim too was the first to send me the link to this news this morning. He was overjoyed that at least he's going to get compensated. He also had a heart when the whole saga happened. He has said he's going to start a farm. I am very happy that justice has been served both ways. SBF goes to jail and clients get their money back.  Crypto is not all that bad but one still has to be careful.

[Nwada001]

According to the news I was reading yesterday, the speculated $14–$16 billion in cash is not yet available in cash, but they have properties worth up to that speculated amount, i.e., their landed property, which was valued to rank up to that amount, and they plan to sell off those assets, and the funds will be more than enough to cover up all the affected victims fund.

FTX Has Billions More Than Needed to Pay Bankruptcy Victims

My question here is: if they have all this asset stocked somewhere together with their crypto holdings, why delay all this time? Victims could have just been refunded even before the CEO was arrested.

There are better ways for him to have settled all this if he never had an existing plan set out that did not work as planned for him.

[JeromeTash]

In a Tuesday press release, the FTX estate said it expects to have between $14.5 and $16.3 billion in cash available for distribution by the time a plan is approved by a Delaware bankruptcy court – the result of a year-and-a-half of scraping together the company’s scattered assets around the world and liquidating them.

If they have 16 billions in cash, and this is from sold coins probably at a profit of over 200% if not 300%, that would still mean FTX had close to 5 billion in coins when it went bankrupt so how did they end bankrupt with that amount of coins? 118% in cash probably $ is well below 100% in coins, I think a bit over half of that but I am surprised at the amounts recovered, wasn't FTX supposed to not have a single penny left and this is why it went down?

We also have to think about people who had their genuine funds locked up after the turmoil and were not able to verify for various reasons such as stringent KYC measure that made them miss out on the claims.

I am still skeptical until people actually receive the 118% of their funds in cash.

[Potato Chips]

So in other words, FTX got lucky the crypto market pumped -- from leftover holdings and investments. Ofc, they had other assets to liquidate but from the looks of it, crypto played a major role. It's worth noting as well that the claimants will only get the dollar value of the funds lost at the time FTX went bankrupt sooo had they kept their crypto self-custodied, they probably would have profited more.

But this is much better than getting scraps. I just hope it doesn't improve FTX's reputation in the crypto space and eventually start the business again...

[tabas]

To be honest, it doesn't matter whether they'd add interest to the refund. What matters is that they give the whole refund and everything that's added is a bonus for the trouble that they've caused. What the victims need is assurance that they're going to get their money back no matter what and since it's already in the court, the next thing is hopefully that the refund process won't take long so that the victims will get their money back because it is rightful theirs and they deserve to have it again.

[Darker45]

This isn't from sold coins. Well, a portion of it is from sold coins, of course, but this is mostly coming from the proceeds of liquidated assets of all kinds all over the world. That includes hundreds of millions worth of Bahamas properties alone. The phrase is "scraping together".

Also, 118% isn't a good amount. When FTX filed for bankruptcy, the price of Bitcoin was only around $16,000. Today, the price is around $63,000. There was already an increase of almost 300%. Not to mention that this is already a correction price. We're already 15% below the ATH.

Moreover, not all creditors will get paid.

My uncle who at the time was one of their clients and is a victim too was the first to send me the link to this news this morning. He was overjoyed that at least he's going to get compensated. He also had a heart when the whole saga happened. He has said he's going to start a farm. I am very happy that justice has been served both ways. SBF goes to jail and clients get their money back.  Crypto is not all that bad but one still has to be careful.

Justice hasn't been served yet.

I hope your uncle is still young and you're not giving him false hope. I hope you will all get paid sooner rather than later. But if we learn our lessons, you might as well hope for the best and prepare for the worst. Mt. Gox creditors were also promised repayments and yet it has already been more than a decade since the collapse. They're still waiting.

[Fiatless]

To be honest, it doesn't matter whether they'd add interest to the refund. What matters is that they give the whole refund and everything that's added is a bonus for the trouble that they've caused. What the victims need is assurance that they're going to get their money back no matter what and since it's already in the court, the next thing is hopefully that the refund process won't take long so that the victims will get their money back because it is rightful theirs and they deserve to have it again.

The good thing is that the company has agreed to refund affected customers. These FTX investors are fortunate because many victims of the fall of centralised crypto service providers didn't get their money back. According to reports they are just waiting for the court order for them to start the process of implementation. I also hope they get back their money because many people had plans for it, and most of these plans were abandoned due to bankruptcy. It took many years for Mt Gox victims to get back their funds, I am just hoping that it will take less time for these refunds to happen. 

[tabas]

To be honest, it doesn't matter whether they'd add interest to the refund. What matters is that they give the whole refund and everything that's added is a bonus for the trouble that they've caused. What the victims need is assurance that they're going to get their money back no matter what and since it's already in the court, the next thing is hopefully that the refund process won't take long so that the victims will get their money back because it is rightful theirs and they deserve to have it again.

The good thing is that the company has agreed to refund affected customers. These FTX investors are fortunate because many victims of the fall of centralised crypto service providers didn't get their money back. According to reports they are just waiting for the court order for them to start the process of implementation. I also hope they get back their money because many people had plans for it, and most of these plans were abandoned due to bankruptcy. It took many years for Mt Gox victims to get back their funds, I am just hoping that it will take less time for these refunds to happen. 

Absolutely, these people are fortunate compared to the disasters that have happened in some exchanges in the past. It took them years of on and off battle to the court until they've been refunded. As long as the many will be refunded to them, that's all that matters because it's a must thing to do by the new management or whoever is taking care of the situation right now. I guess that whoever is behind with all of this will be the ones that shall gain the trust of the people once again but not longer with the same company.

[hugeblack]

If you have a 200k loan, you have 10 bitcoin and the price of bitcoin is 10k, then you will not be able to pay. You can pay the loan with all comfort, what happened to FTX is that they abused customer money in exchange for pumping their token and when everything collapsed, they did not have enough to pay debts, if a correction of SOL price (given that they have large reserves) they will not be able to fulfill these obligations .

[Apocollapse]

Also, 118% isn't a good amount. When FTX filed for bankruptcy, the price of Bitcoin was only around $16,000. Today, the price is around $63,000. There was already an increase of almost 300%. Not to mention that this is already a correction price. We're already 15% below the ATH.

But, most of the coins they have aren't in Bitcoin, check https://platform.arkhamintelligence.com/explorer/entity/ftx

They only hold 1.3K Bitcoin which worth $79.91K right now. Sadly they hold most of their own native token, they own 257.842M FTT which now worth $425.44M, even the price of FTT token back before FTX bankrupt, it's still not enough to reach $14 Billion.

But, they still have properties and they sold their startup which make them enough to raise the money.

[stompix]

Too much negativity in here, feels like some want bad things to happen and when it doesn't they really get angry, I remember the whole saga
- SBF will never be extradited, he has too much money
- SBF will never get arrested, he has too much influence
- Ok, he got arrested but it's house arrests, he will not set foot in jail, he is too rich
- he has been convicted for 25 years but he will not serve those and what about the money
- 7 billion have been recovered but it's not enough
- 16 billion have been recovered, but ...but....

I'm pretty sure that even if Bitcoin falls back to 17k and those guys still get profit even in BTC  terms there will still be someone not happy about it, even if SBF gets stabbed in the last day before his release someone will claim he needed to stay more in prison!

[examplens]

Too much negativity in here, feels like some want bad things to happen and when it doesn't they really get angry, I remember the whole saga
- SBF will never be extradited, he has too much money
- SBF will never get arrested, he has too much influence
- Ok, he got arrested but it's house arrests, he will not set foot in jail, he is too rich
- he has been convicted for 25 years but he will not serve those and what about the money
- 7 billion have been recovered but it's not enough
- 16 billion have been recovered, but ...but....

I'm pretty sure that even if Bitcoin falls back to 17k and those guys still get profit even in BTC  terms there will still be someone not happy about it, even if SBF gets stabbed in the last day before his release someone will claim he needed to stay more in prison!

but... How much money was returned to their users, to those who were really damaged?
It is already taking too long, and the whole process costs a lot. If there is money and a list of how much is owed to whom, there is no reason to delay payment.

We had a similar discussion in the local board, and to me, this looks very much like a bad gambler who promises to return the debt and even the profit. I would like to be wrong, but this will be another Mt.Gox saga.

[stompix]

It is already taking too long, and the whole process costs a lot. If there is money and a list of how much is owed to whom, there is no reason to delay payment.
We had a similar discussion in the local board, and to me, this looks very much like a bad gambler who promises to return the debt and even the profit. I would like to be wrong, but this will be another Mt.Gox saga.

And if things had been done in two days over at MtGox instead of getting 30% back they would have got 2%.
Same here, if they would liquidate everything at 17k people would only have got 30%, not 118%.

As for it taking long, it's a long process because there is always a lawsuit delaying these, and there are always claims, if we talk about MtGox you know the Coinlab saga, then there is the thing that the same credits (victims) must vote in a rehabilitation plan, otherwise, you will just be hit with another lawsuit and another.
Enron filed for bankruptcy in 2001, the final settlement happened in 2009!

There are billions at stake and nobody is going to risk his reputation or his own money by rushing forward and then be held accountable for losses.

[Eternad]

All the customers should receive the same amount of crypto currency on their balance as a refund and not a 118% of the fiat value computed by the time FTX close since they are still holding in coins that they will just convert to fiat once approved by the court.

This is a clear robbery because they will pocket huge profit from the crypto holdings that pump hard already on this bullrun while all the affected users already wait for a long time and just get 18% profit for all the trouble.

This is a good news that they will finally get above 1:1 return but it should be on same crypto value and not the fiat value by the time exchange file bankruptcy.

[target]

Because the price had risen higher already, the more it would be frustrating for them to hear that it's in fiat. They should be profiting by now if it's just the same amount in crypto, this is unfair to those victims. However, they will still be grateful to receive back some of their investment at least rather than nothing just like other exchanges that went offline. All hail SBF!

[examplens]

And if things had been done in two days over at MtGox instead of getting 30% back they would have got 2%.
Same here, if they would liquidate everything at 17k people would only have got 30%, not 118%.

Maybe they are waiting for Bitcoin to go to 100k, then everyone will be in a big plus.  I believe that all their users would rather take 90% now than wait indefinitely for a potential 118%. But no one asks them how they want their money to be managed.

If I remember correctly, Celsius went bankrupt by waiting for the growth of certain assets (bad investments) which never happened. I hope that will not be the case here.

[stompix]

All the customers should receive the same amount of crypto currency on their balance as a refund and not a 118% of the fiat value computed by the time FTX close since they are still holding in coins that they will just convert to fiat once approved by the court.

This is a clear robbery because they will pocket huge profit from the crypto holdings that pump hard already on this bullrun while all the affected users already wait for a long time and just get 18% profit for all the trouble.

At the moment of bankruptcy, FTX held 257 million FTX tokens worth $$6.13B!
Let's count the number of users who would be rather paid in FTX tokens (now worth $1.5) and not at their fiat value, and I have a feeling no rehabilitation plan with the creditors voting for redistribution in coins will be able to pass with a majority.

But no one asks them how they want their money to be managed.

Yes it does, there is voting on in in June, and everyone who has a claim on it can vote on the reimbursement plan, there is no reimbursement whatsoever unless they reach a consensus with the creditors and this is what delayed MtGox for 4 years.

[The Hidebehinder]

But, most of the coins they have aren't in Bitcoin, check https://platform.arkhamintelligence.com/explorer/entity/ftx

Awesome link, but I have to ask when you go to the timeline, are those funds the exchange had in their custody or the claimed coins?
For example two years ago they had 20.15k BTC, are those all the bitcoin the clients had or what they actually had in custody while clients claimed twice as much?