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Home»ADOPTION NEWS»A bankrupt FTX will not be restarted, but former customers will receive a full refund.
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A bankrupt FTX will not be restarted, but former customers will receive a full refund.

By Crypto FlexsJanuary 31, 20243 Mins Read
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A bankrupt FTX will not be restarted, but former customers will receive a full refund.
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Bankrupt cryptocurrency exchange FTX said it plans to repay former customers in full, despite abandoning plans to reopen the exchange.

“We expect to have sufficient funds to pay in full all currently accepted customer and creditor claims.” FTX attorney Andrew Dietderich told the judge during Wednesday’s hearing.

FTX, once led by former CEO Sam Bankman-Fried, filed for bankruptcy in late 2022. Bankman-Fried was discovered. feeling guilty A year later, FTX’s customers, lenders and investors were defrauded.

Dietderich also said FTX has no plans to relaunch its platform.

The companies FTX acquired for hundreds of millions of dollars turned out to be worth little and there weren’t many interested buyers, the lawyer said.

no investors

“The disappointing thing about this is FTX 2.0. We still have valuable customer data and information that we can monetize.” Dietrich said. “However, despite exhaustive efforts, no investor is prepared to commit the capital required to restart an offshore exchange.”

FTX CEO John J. Ray III said Last June, the Wall Street Journal reported that the company had “begun the process of recruiting people interested in rebooting the FTX.com exchange.” FTX is probably rebrand News outlets at the time cited people familiar with the discussions as part of the reopening.

A lawyer representing the Official Committee of Unsecured Creditors said he appreciated FTX’s update.

The lawyer called it “a watershed moment for the debtors.” A disclosure statement likely to pay the client’s claim in full is due in February, but there may be some caveats, lawyers said.

“That full payment will be based on the petition date value of that claim. Many of these claims are premised on currencies that have fallen dramatically in value during the turbulent period leading up to the date of the petition,” the attorneys said.

Many customers and creditors “won’t consider paying the full amount where they started to be true payment,” the lawyer added.

“But we recognize that the petition date is the date that should be used,” the attorney continued.

Later in the hearing, the judge granted the debtor’s motion to convert its claims on the digital assets to U.S. dollars.

The judge said, “Based on the evidence and documents presented and the arguments presented at the hearing, I determine that the estimate is appropriate and that the method of estimating the debtor’s claim is fair and reasonable.”

Details updated at 12:40 PM ET.

Updated at 4:40 PM ET with the judge granting the motion.


Disclaimer: The Block is an independent media outlet delivering news, research and data. As of November 2023, Foresight Ventures is a majority investor in The Block. Foresight Ventures invests in other companies in the cryptocurrency space. Cryptocurrency exchange Bitget is an anchor LP of Foresight Ventures. The Block continues to operate independently to provide objective, impactful and timely information about the cryptocurrency industry. Below are our current financial disclosures.

© 2023 The Block. All rights reserved. This article is provided for informational purposes only. It is not provided or intended to be used as legal, tax, investment, financial or other advice.

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