FTX Bankruptcy Approved, Customers to Receive Refunds

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The Facts

  • US Judge John Dorsey on Monday ruled that former customers of the now-defunct cryptocurrency exchange FTX will be reimbursed around 119% of the money they invested in the company before it went bankrupt in 2022.

  • FTX must pay up to $16.5B in reimbursements, covering an estimated 98% of customers who held $50K or less in their accounts at the time of the bankruptcy. FTX said its goal is to pay between $14.7B and $16.5B.


The Spin

Narrative A

In a perfect world, customers would receive compensation with full interest, but this settlement is better than nothing. By putting a good chunk of the stolen money into valuable assets, Bankman-Fried made sure FTX could make some amends by selling those holdings and paying back most of its victims at 9% interest.

Narrative B

While something is better than nothing, and bankruptcies usually result in zero compensation, it's inaccurate to claim customers are being 100% compensated. If FTX didn't outright steal people's property and use it to fund Bankman-Fried's lavish lifestyle, many of these victims would be enjoying incredible profits right now.


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