FTX plans to refund defrauded customers with interest

has filed a plan in bankruptcy court to pay off creditors who held cryptocurrency on the crippled exchange. The majority of customers are willing to get their money back with interest, even though they (and debtors) missed out on big gains in the crypto market after the dramatic crash of FTX in November 2022 — the price of Bitcoin has tripled since then.

FTX aims to pay non-government creditors in full based on the value of their claims as determined by the bankruptcy court. This means that 98 percent of creditors (those with claims up to $50,000) will receive 118 percent of their allowed claims. Other creditors will get their money back, plus what billions of dollars in compensation “for the time value of their investments.”

State creditors are queuing up for repayment at nine percent interest. The Internal Revenue Service and the Department of Justice are among the interested parties with whom FTX has negotiated settlements.

The company suggests that if its reorganization plan is sealed, it will be able to resolve disputes with private and government stakeholders “without costly and protracted litigation.” In total, FTX says it will be able to distribute between $14.5 billion and $16.3 billion in cash.

But you might be wondering where exactly all this money is coming from? After all, when FTX 17 months ago, it only held 0.1 percent of Bitcoin and 1.2 percent of Ethereum that its customers thought it had.

FTX said it was able to monetize “an extremely diverse collection of assets, most of which are private investments held by Alamedaor FTX Ventures businesses or legal claims.” Like TechCrunch reports, the assets that FTX CEO John J. Ray III and his team have tracked include about $8 billion in real estate, political donations and venture capital investments.

The company filed the updated reorganization plan just weeks after co-founder and former CEO Sam Bankman-Fried (aka SBF) was . He was in November on charges including fraud and money laundering conspiracy.