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FTX Creditors May Be "Fully" Refunded
Those who lost funds when FTX collapsed may get their money back - sort of.
FTX lawyers have told the judge handling the platform's bankruptcy case that creditors may receive a full refund of the money they lost when the exchange failed.
There's a catch, though. A "full" refund in this case doesn't mean they will get back all of the crypto they held on the exchange when it halted withdrawals and declared bankruptcy. Instead, they will receive back the fiat equivalent of the amount they held on that date, when the markets were capitulating. It's estimated that the exchange owes its customers a total of $9 billion.
While it's good news that creditors will receive at least something back, it's hardly the news anyone was hoping for. Even this "full" payout is only possible because crypto has rallied strongly in the intervening 15 months, meaning that the funds recovered are worth substantially more than they were at the time. When FTX went offline, BTC was trading around $17,000.
Needless to say, some holders aren't exactly impressed with this approach, or the way it's being spun.
Separately, two new pieces of information have emerged. Firstly, FTX will not relaunch as an exchange, something that has been suggested in the recent past. The platform was unable to find outside investors to put up the required capital.
Additionally, the FBI has confirmed that a SIM-swap attack was responsible for the theft of $400 million amid the chaos that occurred when FTX was in meltdown and users were racing to withdraw their funds, in November 2021. Sam Bankman-Fried, currently awaiting sentencing for his role in FTX's downfall, has previously claimed this may have been an inside job.
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