FTX announces plan to refund customers, but amount does not reach 100% of losses

In a statement published this Monday (16), bankrupt cryptocurrency broker FTX announced a plan to compensate customers injured by its failure. However, the plan does not provide a 100% refund of any lost amounts.

Although the text indicates that the possible agreement paves the way to end the judicial recovery process, the market does not seem to appreciate the proposed conditions. The FTX Token (FTT) is trading at US$1.03 this Tuesday (17) and is trading at a daily decline of 3%.

On three previous occasions when FTX’s returns were mentioned, FTT showed good gains of up to 40%. FTX’s bankruptcy will be a year old next month and FTT has lost 96% of its value in that period.

FTX plans to pay 90% of the debt owed to its customers

FTX’s new repayment plan, announced on Monday (16), must be submitted to the court by December 16, 2023, with approval required before payments can begin.

“It is expected that customers will receive more than 90% of the distributable value globally if the plan is approved.”

“If approved by the Bankruptcy Court, the Customer Deficit Agreement would resolve customer asset disputes against FTX’s creditors and facilitate confirmation of the amended plan in the second quarter of 2024”the company added.

Despite the rapid progress of the recovery process, not everyone seems satisfied, unlike what happened in the case of real estate agency Mt.Gox. Despite the brokerage disabling comments about the ad on its social networks, several people complained about the conditions presented.

“Lawyers’ creativity knows no bounds when it comes to charging fees to imprisoned creditors. This is the most absurd thing that can come out of FTX and they don’t get a cent back from serious companies.”wrote one investor.

“This agent must leave and never return. I understand why they disabled comments.”

Contrary to what happened in January, April and July, the FTX Token (FTT) showed no gains on the news, another sign of the market’s dissatisfaction with the proposal.

FTX Token (FTT) is falling after the broker's announcement.  Source: TradingView.
FTX Token (FTT) is falling after the broker’s announcement. Source: TradingView.

Finally, FTX is believed to have billion-dollar stakes in several companies that could be sold, including one of the largest artificial intelligence companies that received contributions from Google. Therefore, this could be the reason for the dissatisfaction of aggrieved investors.

U.S. Bankruptcy Court filings and other documents relating to the legal proceedings, including copies of the Customer Deficit Agreement and associated Support Agreement, are available at https://cases.ra.kroll.com/FTX/

Source: Live Coins