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Failed crypto firm FTX says has more than needed to pay victims

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Legend, Sam Bankman-Fried was sentenced to 25 years in prison for defrauding customers

  • Author, Joao da Silva
  • Role, Economic journalist

Collapsed cryptocurrency exchange FTX says it has billions of dollars more than it needs to repay its customers.

The company says that once it sells its remaining assets, it will have $16.3 billion (£13 billion) to cover its debts, which stand at around $11 billion.

The company’s new reorganization plan indicates that almost all of its customers will receive at least the full amount they lost during FTX’s collapse in November 2022.

In March this year, Sam Bankman-Fried, co-founder of FTX, was sentenced to 25 years in prison for defrauding customers and investors of the now-bankrupt company.

“We are pleased to be able to propose a Chapter 11 plan that contemplates repayment of 100% of the bankruptcy claim amounts plus interest to non-governmental creditors,” said the company’s new CEO FTX, John Ray.

The plan still needs approval from a U.S. bankruptcy court.

FTX said it raised the funds needed to pay its debts by selling assets owned by Alameda Research or FTX Ventures.

Alameda was a crypto trading company controlled by Bankman-Fried.

FTX added that a rise in crypto prices since the company’s bankruptcy had not provided a major boost to its finances. He said almost all of the Bitcoin and other digital currencies believed to have been held by the exchange at the time of its collapse were missing.

The price of the largest cryptocurrency, Bitcoin, has risen about 270% since the company filed for bankruptcy more than a year and a half ago.

FTX was one of the largest crypto platforms in the world before its fall.

Bankman-Fried enjoyed celebrity status and his platform attracted millions of customers.

After learning that the company was in trouble, customers withdrew billions of dollars from FTX, triggering the company’s implosion and revealing the extent of Bankman-Fried’s crimes.

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News Source : www.bbc.com

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