FTX creditors have calculated the potential amount of compensation from the bankrupt crypto exchange

What’s new? Creditors of the FTX crypto exchange, which went bankrupt in November 2022, whose top management was accused of multi-billion dollar fraud, will be able to get back only 10-25% of their cryptocurrencies. This was reported by one of the creditors, Sunil Kavuri with reference to the revised court documents. Thus, the amount of compensation will be estimated at the time of bankruptcy filing, when the BTC rate was 75% lower than the current one.

Source: X.com

What else is known? According to Kavuri, not only the exchange’s clients themselves, but also the US Department of Justice and the judge considering the case agreed with the unfairness of such an approach to assessing the amount of compensation. He noted that many clients faced mental problems after the collapse of the exchange, losing all their savings. Many were led to divorces and even suicidal thoughts.

Kavuri also recalled that FTX founder Sam Bankman-Fried himself violated the terms of use of the exchange by expanding the concept of ownership and using customer funds to pay outstanding debts. Earlier this year, Bankman-Fried received a 25-year prison sentence for an $8 billion fraud, but appealed in September to overturn the conviction.

His co-conspirator Caroline Ellison, who ran the hedge fund Alameda Research, received a 2-year prison sentence and an $11 billion fine this month. She pleaded guilty and testified against the FTX founder. Other senior executives, including Gary Wang and Nishad Singh, will face trial later this fall.

“The terms of service are unambiguous that the title of digital assets is owned by the FTX customer. Sam was convicted beyond reasonable doubt for breaking the terms of service and transferring customer funds to pay off Alameda loans and buy Robinhood shares,” Kavuri stressed.

Lawyers for FTX senior executive Ryan Salame are asking the court to overturn the sentence because of the failure to fulfill the terms of the plea bargain

According to the defense side, the prosecutor’s office filed charges against the civilian wife of the senior execitive contrary to the agreements

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In June, FTX clients had already called the bankruptcy process of the exchange a “second act of theft” of their assets in an appeal to the court. They asked to recognize that the $8 billion in assets seized from FTX were their property.