Key Takeaways:
Nearly two years ago the FTX crypto exchange collapsed and since then investors have been in a state of shock and despair. But now positive news has been released that the creditors will receive compensation that would cover up the loss.
This appears to be a relief to the previous customers of FTX. Bankruptcy lawyers reportedly recovered more in assets valued up to $16.3 billion while the estimated debt is only $11 billion. This means that the most affected customers are likely to be reimbursed fully.
It is just a matter of time because the lawyers of the company are highly optimistic about the recovery. The proposed reimbursement is awaiting the court’s approval and once the stage is completed, FTX aims to distribute the recovered funds within 60 days.
The customers could potentially see the fund reimbursed within two months of the court’s green signal.
What do you need to know about the refund?
Customers of FTX will be receiving the value of their assets held at the time of the collapse and not the currency market values. This is feeling like a shortcoming to the customers because of the Bitcoin fluctuations.
The value of Bitcoin has significantly dropped after the FTX crash but has since rebounded. This means that some customers who hold Bitcoin might receive less than the current worth of their assets.
Many customers are disappointed by this. The currently proposed plan ensures that the customers receive the worth of their holdings at a specific point in time.
FTX Collapse & New Beginning
The FTX crypto exchange market collapsed in November 2022. The former CEO of the exchange Mr. Sam Bankman-Fried is serving a 25-year prison sentence. The charges include seven criminal court cases in early November along with the charges related to stealing billions from the customers of FTX.
At the time of the collapse, FTX was the third-largest crypto exchange in the world. John Ray III, the lawyer known for his work in the Eron Bankruptcy was brought in as the CEO.
FTX is gathering funds for customer relief. They have sold various assets including the venture investments they held and investments from Alameda Research, Bankman-Fried’s crypto hedge fund.
Despite all the challenges, this is a glimmer of hope for the users of FTX. As per the reports, most users might be getting a full reimbursement, with bankruptcy lawyers recovering assets more than anticipated.
The situation highlights the volatile nature of the crypto market. The path towards recovery is still a hopeful situation for the customers.
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