FTX Creditors May Recover Only 10-25% of Their Crypto Assets

According to the latest revised bankruptcy documents shared by FTX creditor Sunil Kavuri, FTX creditors might only be able to recover 10-25% of their cryptocurrency holdings. Kavuri explained that creditors will be compensated based on the value of their crypto assets at the time of the bankruptcy filing, which was significantly lower compared to current prices. For instance, Bitcoin was priced around $16,000 when the legal filing was submitted.

Kavuri noted that many FTX customers have experienced mental distress, panic attacks, divorces, and even suicidal thoughts due to the loss of their life savings. Other creditors have similarly expressed anger and frustration. Kavuri also pointed out that Sam Bankman-Fried violated FTX’s terms of service and broader property rights definitions by using customer funds to repay outstanding debts.

On September 6, 2024, the FTX bankruptcy management team reached an agreement with Emergent Technologies, a company founded by Bankman-Fried, to use $600 million worth of Robinhood shares to repay creditors.