FTX expects to repay customers, no exchange relaunch
FTX, the bankrupt cryptocurrency exchange, has announced plans to repay its customers fully.
The decision comes amidst ongoing bankruptcy proceedings, with the company clarifying that it will not attempt to restart the defunct exchange.
This development follows months of uncertainty for FTX users who have been awaiting news on the fate of their funds since the platform’s dramatic collapse.
According to Andy Deitderich, an FTX attorney cited by Reuters, the bankruptcy team has recovered over US$7 billion in assets and reached agreements with regulators and governments to prioritize customer reimbursements before pursuing the recovery of US$9 billion in claims.
The downfall of FTX and its founder Sam Bankman-Fried in late 2022, led to calls for increased oversight and raised questions about the stability of centralized exchanges.
Major crypto trading platforms have since started publishing “proof-of-reserves” to prove their solvency.
FTX filed for bankruptcy along with 130 of its affiliates in November 2022, as it was unable to honor customer withdrawals amid a bank run-style collapse due to misappropriation of customer deposits.
The exchange’s founder Sam Bankman-Fried was found guilty of seven counts of fraud and conspiracy. He faces up to 115 years in prison and his sentencing hearing is scheduled for March 28, 2024.
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