Customers who lost their money when crypto exchange FTX collapsed in late 2022 are set to get their money back—and then some.
That’s according to an announcement released today by FTX’s legal team, which outlines a reorganization plan that includes repaying those customers who had less than $50,000 in assets on the exchange when it collapsed up to 118% of their assets’ value—so full repayment, plus interest. The announcement says that 98% of FTX’s users had less than $50,000 in assets, and as such, the vast majority of customers who lost their money should be able to get it back.
The plan does hinge on the approval of a Delaware bankruptcy court, where FTX’s bankruptcy proceedings are playing out. Earlier this year, FTX’s lawyers said that the company was scratching plans to attempt to relaunch the platform and instead would focus on repaying investors and customers.
The catch was that investors who lost their assets have missed out on capital gains during the recent crypto market recovery. For instance, when FTX collapsed in November 2022, Bitcoin was trading for less than $20,000, and today it’s north of $62,000. So for customers who lost their Bitcoin holdings, there are huge potential value gains that cannot be recovered.
Even so, if the plan is finalized and FTX manages to get money back to customers, it’d likely be a big relief as the company is believed to owe billions to creditors. The announcement says that FTX is believed to have collected between $14.5 billion and $16.3 billion to distribute.
“We are pleased to be in a position to propose a Chapter 11 plan that contemplates the return of 100% of bankruptcy claim amounts plus interest for nongovernmental creditors,” said John J. Ray III, CEO and chief restructuring officer of FTX in the company’s announcement. “I want to thank all the customers and creditors of FTX for their patience throughout this process.”