Court documents suggest that FTX investors might see just 10-25% of their crypto, as announced by Sunil Kavuri, an FTX creditor activist.
The US Department of Justice plans to allocate 18% of seized assets into a “Preferred Shareholder Remission Fund,” which will reimburse shareholders who held stakes before the company’s collapse. This fund is capped at $230 million.
This decision has sparked outrage among FTX crypto investors, as they are now expected to receive much smaller payouts than anticipated.
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Kavuri highlighted another major sticking point: the repayments will be based on the value of assets when FTX declared bankruptcy rather than their current, much higher prices. At the time, Bitcoin (BTC) was worth approximately $16,000, compared to its current valuation of over $64,000.
FTX went bankrupt in 2022, having misappropriated customer funds for personal use and political contributions. Last month, the company settled with the United States Commodity Futures Trading Commission (CFTC), ordering it to pay $12.7 billion.
FTX leadership also faces legal consequences. Founder Sam Bankman-Fried was sentenced to 25 years in prison, while Caroline Ellison, the former CEO of FTX’s sister company Alameda Research, received a two-year sentence.
As legal battles unfold and compensation plans shift, the FTX saga continues, leaving creditors and investors grappling with limited recovery options.
Gode is a Web3 Market Analyst who researches the most important industry events and interprets how they affect the wider Web3 space. Her formal education in media culture & digital rhetoric allows her to employ a methodical approach to evaluating critical Web3 news data, including large-scale events and the wider social sentiment within the ecosystem.
Gode is a mutilingual professional, having studied in multiple universities all across Europe. This allows her to have a one-of-a-kind opportunity to analyze Web3 social sentiments spanning different cultures and languages and, in turn, develop a much deeper understanding of how the Web3 space is growing within different communities. With the rest of her team, Gode works to identify crucial crypto news patterns and provide unbiased and data-driven information.
Gode’s passions include working and communicating with people, and when she’s not researching Web3 news, she spends her time traveling and watching true crime documentaries.
