Former FTX customers “have reason to believe they can actually get their money back,” CNBC reports.
Bankman Fried, who could have spent the rest of his life in prison, was found guilty in November on seven criminal charges after about $10 billion of his company's client funds went missing. Some of that money was used to pay for Bankman Freed's lavish lifestyle, but much of it went into other investments that have increased dramatically in value recently. Lawyers representing FTX's bankruptcy estate told a Delaware judge last week that the company plans to fully repay customers and creditors with legitimate claims. Andrew Diederich, a bankruptcy lawyer working with FTX's new management team, said “there is still a great deal of work and risk left” to recover full amounts for customers, but that the team has “a strategy to achieve it.” ”.
This is for the thousands of customers (some say up to 1 million) who collectively lost billions of dollars in the FTX collapse 15 months ago, when the cryptocurrency exchange went bankrupt within days. is a welcome development. Given the poorly regulated and unsafe nature of FTX, and the crypto industry as a whole, these customers faced the real possibility that a large portion of their funds would evaporate. Many failed hedge funds and lenders lost virtually everything during the crypto winter of 2022… [C]Crypto was in a bear market, with Bitcoin trading around $16,000. It's now over $47,000… FTX's Bitcoin stash, which was worth $560 million as of September's report, is worth over $1 billion today.
Bankman Fried’s investments were not limited to cryptocurrencies. He also used customer funds to back startups like Anthropic, an artificial intelligence company founded by former OpenAI employees. FTX invested his $500 million in Anthropic in 2021, before the generation AI boom happened. Anthropic's valuation will reach $18 billion in December 2023, making its roughly 8% stake in FTX worth about $1.4 billion.
CNBC suggests this could affect Bankman-Fried's prison term, which will be determined next month.
There is also now a so-called “FTX IOU” market where investors sell their debt, CNBC added. “A financial company that suffered losses of about $100 million initially sold its FTX bonds for 6 cents on the dollar, fearing it might not get a better deal.As of December, these 's debt was over $70. Dollars are cents.”
CNBC also reported that FTX was “in talks with bidders about a possible reboot of the company, but those efforts were halted last month.”
