People who lost their money in FTX, once one of the biggest cryptocurrency exchanges in the world, are to be paid back, with interest.
Billions were lost when the cryptocurrency exchange headed by convicted fraudster Sam Bankman Fried went bust in November 2022, with an estimated one million customers losing funds.
Money latest: Struggling iconic tea brand spends £12m on ad
But now the company has recouped more than enough to repay those customers and its creditors, it said.
Paying people back
If plans are approved by a US bankruptcy court, people who held cryptocurrency, such as Bitcoin, with the exchange will be able to get the sums back. Some will be able to get up to 9% more in interest.
Between $14.5 (£11.6bn) and $16.3bn (£13.04bn) is available to be distributed, FTX said, the combined value of property collected and converted to cash.
Its debts, however, only add up to about $11bn (£8.81bn).
FTX has been able to monetise “an extraordinarily diverse collection of assets”, most of which were investments made by FTX or its investment company Alameda Research, it said.
The vast majority of creditors – 98% – will get 118% of the amount due and receive it within 60 days of FTX’s proposed plan coming into effect.
These are people or organisations owed $50,000 or less by FTX.
The fall of FTX
Mr Bankman Fried was found to have lied to investors and to have stolen billions of customer funds to make political donations, bribe officials and fund his life in the Bahamas.
He was in March sentenced to 25 years in jail.
At the time of its collapse, FTX held only 0.1% of Bitcoin and only 1.2% of another cryptocurrency, Ethereum, that customers thought it held.
As reports of the troubles at the firm brewed customers rushed to withdraw their crypto from the company. Many were then locked out of their accounts and unable to make withdrawals.
Mr Bankman’s belief – effective altruism
A key belief for Mr Bankman Fried which he championed – and was the raison d’etre for founding FTX – was effective altruism.
Proponents of effective altruism believe in earning as much money as possible and using evidence-based approaches to benefit humanity as much as possible with the cash.
The £14.9m UK manor home nicknamed Effective Altruism Castle is being sold, just two years after being bought by the Effective Ventures Foundation (EV), which had been supported by FTX.
Wytham Abbey, outside Oxford, is currently up for sale at £15m.
“The proceeds of the sale, after the cost of sale is covered, will be allocated to high-impact charities,” said the chief executive of EV UK Rob Gledhill.