The Bankruptcy Estate of Former Crypto Exchange FTX Selling Crypto Assets to Repay Customers
The bankruptcy estate of former cryptocurrency exchange FTX is selling off billions of dollars worth of crypto assets in order to pay out customers who had their accounts frozen during the exchange’s collapse. According to a report by Bloomberg, FTX has begun selling digital assets as a means of repaying its customers.
FTX Affiliated Firms Raise Cash Reserves
The report reveals that the four largest firms affiliated with FTX, including Alameda Research, have raised the estate’s cash reserves to around $4.4 billion by the end of 2023, up from $2.3 billion in late October. The overall cash supply of FTX is likely even higher if all of its affiliates are included.
Efforts to Recover Assets and Sue Former Associates
Since its collapse, advisers for FTX have been tracking down assets, striking deals with smaller customers, and suing former associates of Sam Bankman-Fried, the disgraced founder of the exchange. They have also taken legal action against other crypto firms for allegedly withdrawing cash before FTX filed for bankruptcy.
Challenges in Repaying Customers
Despite its efforts, FTX does not expect to fully repay its customers. Users of FTX.com are expected to bear the brunt of the losses. Additionally, customers are challenging the company’s proposal to peg the value of their digital assets to what it was at the time of FTX’s collapse, potentially missing out on gains from 2023.
FTX Customer Claims Increase in Value
Currently, FTX customer claims are worth $0.73 on the dollar, according to investment firm Cherokee Acquisition. This is an increase from $0.38 on the dollar in October.
Hot Take: FTX Estate Selling Crypto Assets to Repay Customers
The bankruptcy estate of former crypto exchange FTX is selling off billions of dollars worth of crypto assets to repay customers who had their accounts frozen during the exchange’s collapse. While efforts are being made to recover assets and sue former associates, FTX does not expect customers to be fully repaid. Customers are challenging the company’s proposal for valuing their digital assets, potentially missing out on gains. Despite these challenges, FTX’s customer claims have increased in value.
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