Forex

FTX’s Remarkable Recovery: A Second Chance for Investors?

Dear readers, there is good news for those of you who have invested in the FTX crypto exchange.

This news may be a solution for those of you who feel hopeless after FTX went bankrupt in November 2022.

What is FTX?

FTX is a centralized cryptocurrency exchange that was founded in 2018 by Sam Bankman-Fried.

It quickly gained prominence in the world of digital currency, handling about 11% of the $2.4 trillion in derivatives traded each month.

What Does FTX Do?

FTX specialized in derivatives and leveraged products.

It supported trading for popular cryptocurrencies like Bitcoin (BTC), Ethereum (ETH), and Tether (USDT). It also supported non-fungible tokens (NFTs), and spot, derivatives, and leveraged markets.

How Did FTX Grow So Quickly?

FTX used aggressive marketing strategies and offered low trading fees to attract users.

It also made high-profile acquisitions and received almost $2 billion in investment from major venture capital groups. This rapid growth led to FTX’s valuation skyrocketing from $1.2 billion to $32 billion.

What Happened to FTX?

Unfortunately, FTX filed for bankruptcy protection in the U.S. in November 2022.

Its founder, Sam Bankman-Fried, was charged and convicted for stealing customer deposits and defrauding investors. Despite this setback, FTX has proposed a plan to return almost all of its customers’ lost funds.

Good News from FTX

FTX had a major problem and many customers lost their money.

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But, there’s good news!

FTX has made a plan to help customers get their money back. They have submitted what is called a “reorganization plan” to the bankruptcy court in the United States.

Here are some key points from the plan:

  1. Refund of Funds: FTX plans to repay almost all of their customers who lost money. According to reports, 98% of FTX creditors are ready to receive at least 118% of the allowed claims in cash. This means if someone lost $100, they could get back around $118.
  2. Source of Funds: FTX has raised funds between $14.5 billion to $16.3 billion for distribution to creditors. These funds come from various sources, including the sale of assets and investments owned by FTX.
  3. Approval Process: This plan still needs to be approved by the bankruptcy court in Delaware, United States. If approved, payments can be made within 60 days.

So, although many people lost money due to problems at FTX, it seems there is hope for them to get back some or all of their money.

This is certainly good news for those affected.

How Does It Work?

So, how does this FTX refund plan work?

FTX plans to return customer assets based on the market value at the time of bankruptcy.

This means that the amount of money to be returned to customers will be calculated based on the value of their crypto assets at the time FTX went bankrupt.

Let’s take an example.

Suppose you have 1 Bitcoin in FTX, and when FTX went bankrupt, the value of 1 Bitcoin was $30,000. Then, FTX will try to return $30,000 to you, not the amount of Bitcoin you have.

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However, there is one important thing to remember.

The value of crypto assets can fluctuate. So, if the value of Bitcoin rises to $40,000 after FTX’s bankruptcy, you will still only get back $30,000, not $40,000.

This is because FTX returns funds based on the asset value at the time of bankruptcy, not the current asset value.

So, although this may not be the news some people were hoping for, this is how FTX is trying to be fair and transparent in this refund process.

What Should Customers Do?

If you are an FTX customer, here are some steps you may need to take:

  1. Stay Calm and Patient: This process may take time. FTX has prepared a strategy and is working hard to achieve this goal. So, the best thing you can do is stay calm and patient.
  2. Follow FTX Instructions: FTX may send further instructions or information to its customers. Make sure to read and follow these instructions.
  3. Check Your Account: You may need to check your account regularly to see if there are any updates or changes.
  4. Contact FTX Customer Support if Needed: If you have any questions or concerns, don’t hesitate to contact FTX customer support. They are there to help you.

Remember that although there are many risks and challenges to face, FTX believes that its goal can be achieved. So, even though this may be a difficult time, there is hope for the future.

Conclusion

This news is certainly a breath of fresh air for FTX customers. Although there are many challenges to face, FTX has shown its commitment to providing “full recovery” to all parties involved.

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What do you think about this news? Do you feel relieved with this plan? Or do you still have doubts? Come on, share your opinion in the comment column below. We look forward to an interesting discussion from all of you.

Source:

  • https://www.msn.com/en-gb/money/other/ftx-files-amended-reorganization-plan-expects-14-5-billion-16-3-billion-for-distribution/ar-BB1m5gpE?ocid=BingNewsSerp
  • https://techstory.in/ftx-announces-plan-to-repay-former-customers-nearly-100-of-lost-funds/
  • https://money.usnews.com/investing/news/articles/2024-05-07/ftx-files-amended-reorganization-plan-expects-between-14-5-billion-16-3-billion-for-distribution
  • https://www.msn.com/en-us/money/markets/collapsed-ftx-says-it-can-pay-most-creditors-back-in-full/ar-BB1m1Teb?ocid=BingNewsSerp

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