Will FTX customers truly receive 100% of their lost assets?

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FTX Customers May Receive Full Claim Amounts Plus Interest, Excluding Crypto Appreciation

FTX has announced a plan to make customers whole on assets lost during its 2022 collapse, proposing distributions between US$14.5 billion and US$16.3 billion. This plan aims to return 100 per cent of bankruptcy claim amounts plus interest for non-governmental creditors. However, the significant appreciation in Bitcoin and other cryptocurrencies since November 2022 will not be included in these repayments.
Proposed Distribution Plan

The proposed plan, announced on Wednesday, outlines the centralised distribution of virtually all assets associated with FTX at the time of its November 2022 collapse to customers and other creditors globally. FTX Trading LTD stated that this initiative contemplates the return of 100 per cent of bankruptcy claim amounts, with added interest for non-governmental creditors. This is a significant development following the company's sudden failure and subsequent bankruptcy proceedings.
Funding the Repayments

The funds for these distributions are being generated through the monetisation of a diverse range of assets. These primarily include investments held by FTX and its affiliates, as well as proceeds from litigation claims. Additionally, FTX will resolve claims with the Internal Revenue Service (IRS), agreeing to pay US$200 million in cash and a further US$685 million after other claims are settled, which was part of resolving disputes that previously sought approximately US$24 billion.
Conditions and Exclusions

While the plan offers a substantial recovery for customers, it is contingent upon approval by a Delaware bankruptcy court. Furthermore, the repayment structure specifically excludes the gains made from the rise in value of cryptocurrencies like Bitcoin since FTX's collapse in November 2022. The plan also stipulates the payment of interest, capped at up to 9 per cent, on the claim amounts.

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Will FTX customers truly receive 100% of their lost assets?

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