- FTX crypto holders to recover only 10-25% of lost assets.
- Repayments based on petition date prices, frustrating creditors.
FTX crypto holders are expected to recover only 10-25% of their lost assets according to recent court documents shared by self-proclaimed FTX creditor activist Sunil Kavuri.
The documents revealed that FTX will transfer 18% of forfeited funds from the US Department of Justice into a special “Preferred Shareholder Remission Fund.”
The $230 million-capped fund will compensate FTX’s preferred shareholders — investors who held equity in the company before its collapse.
While these shareholders stand to benefit, many FTX crypto holders are frustrated, as their recoveries are expected to be much lower.
In response to his post, one user echoed the sentiment: “Disgraceful, we have been scammed twice!”
Kavuri also pointed out that repayments will be calculated based on the asset prices at the time of FTX’s bankruptcy filing. For example, Bitcoin was priced at around $16,000 at the time, compared to its current value of $65,000, while Solana was valued at $17, far below its current price of $160.
In August, FTX and its affiliate Alameda Research were ordered to pay $12.7 billion to victims of the fraud.
The company was revealed to have misused customer funds for personal investments and political contributions, leading to its downfall in late 2022.
Founder Sam Bankman-Fried was subsequently sentenced to 25 years in prison for his role in the massive $11 billion fraud.
Crypto market movers
- Bitcoin is down 0.2% today to trade at $65,546.
- Ethereum is down 1.2% in the last 24 hours, trading at $2,643.
What we are reading
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- MicroStrategy’s Stellar Performance Won’t Lead to S&P 500 Inclusion Anytime Soon — Milk Road
- BlackRock’s spot Ethereum ETF surpasses $1 billion in value for the first time — The Block
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