Skip to content

FTX Has Billions in Excess, Aims to Return At Least 100% of Bankruptcy Claims

FTX owes creditors about $11 billion but is expected to sell assets worth $14.5 billion and $15.8 billion

Table of Contents

Almost all FTX account holders are set to receive more than 100% of their original claims according to a reorganization plan submitted by the bankrupt exchange.

FTX disclosed that it amassed approximately $15 billion from liquidating Alameda Research's VC investments. This amount is enough to reimburse 98% of FTX creditors who hold claims of $50,000 or less at a rate of 118 cents on the dollar. Remaining creditors will receive no less than 100 cents on the dollar.

The exchange's collapse in November 2022 wiped out an estimated $200 billion in crypto market capitalization. FTX founder Sam Bankman-Fried (SBF) has since been sentenced to 25 years in federal prison.

Sam Bankman-Fried Pays $605 to Appeal 25-Year Prison Sentence, Crypto Twitter Unconvinced
SBF is appealing his 25-year prison sentence and fraud conviction but on what grounds?

“We are pleased to be in a position to propose a Chapter 11 plan that contemplates the return of 100 per cent of bankruptcy claim amounts plus interest for non-governmental creditors,” current FTX CEO John Ray III said on Tuesday.

Ray previously slammed FTX, which he took over after its bankruptcy, as a "dumpster fire" and "crime scene."

FTX also revealed that 99% of its bitcoin and crypto held by the exchange at the time of bankruptcy were unaccounted for so the recent surge in crypto prizes has not materialized.

Anthropic was a key asset for the exchange, which sold its shares in the AI startup for almost $900 million this year. FTX's selling of assets into cash is expected to range between $14.5 billion and $15.8 billion. The company owes creditors around $11 billion.

Earlier this year, FTX claimed it had $6.4 billion in cash due to a surge in prices of cryptocurrencies under its belt such as Solana. FTX has since announced it will be functioning off its remaining SOL holdings in an attempt to fetch a higher price than direct sales.

The bankrupt exchange's initial liquidation plan was to sell its $7.5 billion worth of SOL at fixed market prices. FTX began selling SOL in March at discounts. One transaction saw the sale of 26,964 SOL at $64 per token - 67% lower than market value at the time.

FTX to Auction Off Its Locked Solana Tokens, Seeks Higher Price
FTX is auctioning off its $7.5 billion worth of SOL in the hopes of fetching a higher price than the original liquidation plan of direct sale.

Claimants will vote on the plan once the bankruptcy court approves it, ahead of a final hearing to formally confirm it. Recoveries will be based on crypto prices at the time of bankruptcy filing.