365Crypto
The downfall of FTX keeps getting worse for its customers. After the FTT token lost more than 80% of its value, wiping out $2 billion, it’s now clear that creditors are only going to recover between 10% and 25% of their cryptocurrency.
Refunds Based on Lower, Old Prices
FTX creditor Sunil Kavuri explained that payouts will be based on cryptocurrency prices from the time FTX filed for bankruptcy. For example, Bitcoin was only worth around $16,000 back then, much lower than it is today. Not surprisingly, this has left a lot of FTX customers angry.
Many are still dealing with the emotional fallout of the collapse. Kavuri said that people are suffering financially and emotionally, with some going through panic attacks, divorces, and serious mental health issues because their money hasn’t been returned.
Customers Feel Cheated
It’s not just Kavuri who’s upset. Other FTX creditors feel like they’ve been scammed twice. They’re disappointed that the legal system hasn’t done more to help them, and many are still reeling from the loss of their savings.
Kavuri also accused FTX’s former CEO, Sam Bankman-Fried, of breaking the company’s own rules. He claims Bankman-Fried used customer funds to pay off debts and buy shares in companies like Robinhood.
Robinhood Shares for Creditor Payments
Earlier in September, FTX struck a deal with Emergent Technologies, a company linked to Bankman-Fried, to recover $600 million worth of Robinhood shares. This money will go toward paying back creditors, but there’s still a lot of uncertainty around how much creditors will actually get.
Legal Concerns with Bankruptcy Plan
It’s not just creditors who are concerned. A U.S. trustee overseeing the bankruptcy raised issues with the plan in August, saying it gives too much legal protection to FTX’s administrators. The SEC is also considering opposing the plan if FTX tries to pay clients using stablecoins.
