FTX says it will pay back customers
Illustration: The Verge
FTX says it will repay investors after the cryptocurrency exchange’s collapse led to the loss of billions of dollars. During a court hearing on Wednesday, FTX lawyer Andrew Dietderich said the company expects to “have sufficient funds to pay all allowed customer and creditor claims in full.”
The company will recompense customers based on the price of the cryptocurrency they purchased as of November 2022 — when the exchange filed for bankruptcy. There are still some challenges associated with getting the lost funds back to customers, though, as Dietderich notes the company will need to comb through all the claims to determine whether they’re legitimate.
“I would like the court and stakeholders to understand this not as a guarantee, but as an objective,” Dietderich said. “There is still a great amount of work and risk between us and that result, but we believe the objective is within reach, and we have a strategy to achieve it.”
Dietderich also said the company no longer has plans to reboot the exchange, something that was rumored last year. “This hopefully puts to bed the alternative narrative that this business was just fine all along,” Dietderich says. “It was an irresponsible sham, created by a convicted felon.”
FTX previously reported having over 36,000 claims adding up to about $16 billion. Last year, it said it would only be able to compensate around 90 percent of customers. FTX, which was once one of the largest crypto exchanges, collapsed in November 2022, leading to the arrest of founder and former CEO Sam Bankman-Fried. A federal court found Bankman-Fried guilty of fraud last November.
Illustration: The Verge
FTX says it will repay investors after the cryptocurrency exchange’s collapse led to the loss of billions of dollars. During a court hearing on Wednesday, FTX lawyer Andrew Dietderich said the company expects to “have sufficient funds to pay all allowed customer and creditor claims in full.”
The company will recompense customers based on the price of the cryptocurrency they purchased as of November 2022 — when the exchange filed for bankruptcy. There are still some challenges associated with getting the lost funds back to customers, though, as Dietderich notes the company will need to comb through all the claims to determine whether they’re legitimate.
“I would like the court and stakeholders to understand this not as a guarantee, but as an objective,” Dietderich said. “There is still a great amount of work and risk between us and that result, but we believe the objective is within reach, and we have a strategy to achieve it.”
Dietderich also said the company no longer has plans to reboot the exchange, something that was rumored last year. “This hopefully puts to bed the alternative narrative that this business was just fine all along,” Dietderich says. “It was an irresponsible sham, created by a convicted felon.”
FTX previously reported having over 36,000 claims adding up to about $16 billion. Last year, it said it would only be able to compensate around 90 percent of customers. FTX, which was once one of the largest crypto exchanges, collapsed in November 2022, leading to the arrest of founder and former CEO Sam Bankman-Fried. A federal court found Bankman-Fried guilty of fraud last November.