The FTX bankruptcy estate has disclosed plans to commence repayments to customers by the close of 2024, as revealed during a recent meeting of FTX Digital’s Joint Official Liquidators in the Bahamas. This initiative comes as part of the ongoing efforts to address the fallout from the collapse of FTX, which includes the Chapter 11 bankruptcy overseen by a Delaware court in the United States and the official liquidation of FTX Digital, its Bahamas-based subsidiary.
Collaboration ensures fair distribution
Both entities have agreed to collaborate, enabling creditors to submit their claims to either party and ensuring that no creditor receives less than their entitled value. The aim is to make the first interim distribution to creditors with admitted claims and satisfactory Know Your Customer (KYC) documentation by the conclusion of 2024.
Creditors have been actively submitting claims through FTX’s claims portal since March 1, with the deadline for claim submission initially set for May 15. Still, it is expected to be extended to at least June 2024 based on recent developments.
FTX has taken steps to liquidate assets to repay creditors, including the recent sale of most of its shares in AI startup Anthropic for $884 million. This move follows FTX and its sister firm Alameda’s initial $500 million investment in Anthropic in 2021, holding a 7.84% stake.
The subsequent surge in the artificial intelligence sector, fueled partly by the rising popularity of ChatGPT, led to a doubling in the value of these shares. Anthropic has secured substantial funding, totaling around $7 billion, from major tech players such as Amazon, Alphabet, and Salesforce.
Founder of FTX sentenced to 25 years in prison
In a separate development, Sam Bankman-Fried, the founder of the collapsed crypto exchange FTX, has been sentenced to 25 years in prison following his conviction on all seven counts related to fraud and money laundering. Approximately five months after his guilty verdict, the sentencing underscores the severe consequences of FTX’s collapse. The Department of Justice (DOJ) sought a longer sentence, aiming for a 40 to 50-year term.
Judge Lewis Kaplan of the Southern District of New York (SDNY) highlighted Bankman-Fried’s demeanor during the trial: “When not lying, he was evasive, hair-splitting, trying to get the prosecutors to rephrase his questions. I’ve been doing this job for close to 30 years. I’ve never seen a performance like that.” Despite the absence of parole in federal criminal cases, Bankman-Fried may reduce his sentence with good behavior, possibly serving as little as 12.5 years.
As the FTX bankruptcy estate progresses towards repayment to creditors, the collaboration between the Chapter 11 bankruptcy overseen by a Delaware court and the official liquidation of FTX Digital in the Bahamas ensures a fair distribution of assets.
Meanwhile, the sentencing of FTX’s founder to 25 years in prison underscores the serious legal ramifications of the collapse. With ongoing developments, stakeholders monitor the situation closely for further updates.
