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Home » FTX Bankruptcy: Promising 100% Money Back to Customers in Remarkable Turnaround

FTX Bankruptcy: Promising 100% Money Back to Customers in Remarkable Turnaround

Hania by Hania
February 1, 2024
in Crypto Exchanges
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FTX Bankruptcy: Promising 100% Money Back to Customers in Remarkable Turnaround
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In a significant turn of events, FTX, the defunct cryptocurrency exchange that faced a collapse over a year ago, is now anticipating a full repayment to its customers and creditors. The company, which left counterparties in a financial quandary, is pivoting towards an optimistic outlook on asset recovery.

The Journey to Full Asset Recovery

During a recent court hearing, FTX lawyer Andrew Dietderich expressed the company’s commitment to achieving a 100% repayment to its customers and creditors. While he acknowledged that this isn’t a guaranteed outcome, Dietderich emphasized that it is an attainable objective, outlining a strategic plan to work towards this ambitious goal.

Challenges and Considerations in Dollar-Value Repayment

The notion of a “full” recovery implies repaying customers based on the dollar value of their crypto assets at the time of the company’s collapse. However, this approach may not be entirely favourable for crypto traders, especially those holding Bitcoin, considering the significant increase in its value since the exchange’s demise.

FTX Bankruptcy: Promising 100% Money Back to Customers in Remarkable Turnaround

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Kris Hansen, an FTX Creditor Committee lawyer, pointed out challenges related to claims based on currencies that experienced dramatic declines in value during the turbulent period preceding the bankruptcy.

Travis Kling, the head of a fund manager impacted by FTX’s collapse, expressed both surprise and reservation about the promised returns, noting that there might be room for the estate to adjust pricing mechanisms to better accommodate creditors.

Why FTX Won’t Relaunch

Despite initial considerations, FTX has decided against the potential relaunch of the exchange. The decision stems from the belief that salvaging a profitable business from the aftermath of its former boss, Sam Bankman-Fried, would be too costly and risky.

Bankman-Fried faced legal consequences, including convictions for fraud and conspiracy, highlighting the unsavoury business practices that contributed to FTX’s downfall.

The abandonment of plans to relaunch also underscores the challenging task of rebuilding FTX’s tainted reputation, considering the financial mismanagement that led to significant losses for customers and counterparties.

Tags: crypto newsFTX NEWSSam Bankman-Fried
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Hania

Hania

Hania is a 30-year-old blogger who used to be a teacher before entering the world of writing. She is originally from India and has been writing blogs on various topics for 2 years now. Hania is particularly interested in exploring the intersections of finance, technology, and cryptocurrency. Her experience as a teacher has given her unique insights into the ways in which digital media can be used to facilitate learning and engagement. Through her writing, Hania hopes to share her knowledge and learning of crypto industry with everyone.

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