FTX customers have received an official sanctioned repayment schedule from a judge and are almost halfway to being made whole, almost 22 months after FTX disappeared.
The approved deal enables a situation whereby 98% of the creditors will be paid an amount equal to one hundred and nineteen percent of the claim, which amounts to giving interest on the debts to cater for the delay and the distress that came with the bankruptcy.
The Consequences of Poor Management on Investor Returns
This ends the long process, which most victims can now relinquish, although some creditors are still unsatisfied.
This must frustrate their efforts big time. The bonuses will be calculated based on November 2022 numbers favorable for cash holders but adverse to those of cryptocurrencies.
This is especially unpalatable to clients holding Bitcoin, Ether, Solana, or any other virtual currency, as some payout terms are unfavorable. For instance, an FTX user who had 1 BTC and 10 SOL will be credited only about $18 667, far less than the value of the assets then.
Suppose the payment is evaluated based on the present market price. In that case, that same creditor has the legal right to receive about $64,000 a month, approximately 3.8 times the amount that this creditor will get under the sanction proposal plan.
Most people who invested in FTX believed in its founder, Sam Bankman-Fried, based on the glamorous commercials and the company’s look and feel. Now, they have to reconcile themselves to the fact that FTX was poorly managed and that risky positions were taken using customers’ money without their consent.
Despite this, some suggest that all the FTX customers should count themselves lucky that it is not even worse.
Tracking The Blessings
It seems, however, that while FTX customers have been left out of the recent gains of the rally on cryptocurrencies, this perspective often dwells more on the negative. But if you take a more positive perspective, the victims will soon be paid every dollar they put in the exchange from their first deposit, plus much more.
This compensation will be higher than the interest earned in a normal savings account, and the capital invested will not be eaten up by inflation.
Again, this is a break for such people to get a fresh start and start again, denying them an opportunity to revisit their past.
It is better than going to war for wages or seeing their earned money drain out. Overall, it could have been a lot worse. Furthermore, while Sam Bankman-Fried got a 25-year prison term and Caroline Ellison started her two-year term, the victims can find some consolation.
While FTX customers have been stressed, anxious, or even suffered severe economic losses, one should not dwell too much on virtual ‘might-have-been’ or cry over the repayment scheme’s terms. However, now is probably the best time for them to look forward and start exploring new opportunities.
