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FTX Creditors Likely To Be Paid up to 140% the Value of Their Original Claims: Report

March 27, 2024

FTX’s bankruptcy estate is primed to pay its creditors more than the value of their original claims, according to the Financial Times.

Citing two people “with knowledge of the restructuring negotiations,” FT reports that the imploded crypto exchange will likely pay its former customers 120-140% of the value of their holdings on the day FTX filed for bankruptcy in November 2022.

The increased payouts are thanks to soaring crypto prices and FTX’s 8% stake in the AI (artificial intelligence) safety and research company Anthropic. The bankrupt exchange’s administrators reportedly plan to sell two-thirds of that Anthropic stake to a group of investors for $884 million.

The size of creditor repayments hinges on whether the U.S. Internal Revenue Service (IRS) maintains its demand for $24 billion in unpaid taxes.

FTX’s legal team has also reportedly argued that the bankrupt crypto exchange owes no taxes to the IRS since it repeatedly recorded losses over its three-year lifespan.

Disgraced FTX founder Sam Bankman-Fried was found guilty late last year of defrauding investors and mishandling billions of dollars worth of customer funds related to the multi-billion-dollar downfall of the exchange in 2022.

Prosecutors have recommended a prison sentence of 40-50 years for Bankman-Fried, although the former CEO’s lawyers have reportedly argued that he should serve a maximum of 6.5 years, pointing to the size of creditor repayments.

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