FTX to return customers with a Bitcoin price below $18,000
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Crypto exchange FTX has decided not to resume operations and will instead continue to liquidate assets to return customers, Reuters reported on Wednesday. However, in the US bankruptcy, payments will be calculated based on the price of Bitcoin in November 2022, especially when Bitcoin was trading below $18,000.
This decision has caused resentment among many FTX customers, who argue that this review will cause them to lose money. In response to these complaints, U.S. Bankruptcy Judge John Dorsey sided with FTX, emphasizing that U.S. bankruptcy law requires that debts be paid based on their value at the time of the bankruptcy filing.
“I have no wiggle room on this,” Dorsey said. “The bankruptcy code says what it says, and I have an obligation to follow it.”
FTX also clarified that not all customers will be eligible to pay immediately. The organization noted the need for thorough investigation into which claims are legitimate.
FTX CEO John J. Ray III has previously expressed optimism about finding partners interested in reviving FTX's operations. However, a lack of capital forced the group to abandon this relaunch plan, FTX attorney Andy Ditderich explained in a Delaware bankruptcy court hearing. He explained that many of the acquisitions made under former CEO Sam Bankman-Fried failed to attract investor interest, resulting in reduced valuations.
Bankman-Fried, who led FTX into bankruptcy in late 2022, was found guilty of seven counts of fraud. The hearing is set for March 28.
According to Dietderich, FTX has recovered more than $7 billion in assets for customer payments and has reached an agreement with regulatory agencies to prioritize the return of customer funds.
After the payment plan was announced, FTT prices fell by 40%. According to data from CoinGecko, FTT is trading below $2 at press time, down more than 14% in the last 24 hours.
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