FTX’s bankruptcy estate is set to exceed expectations by paying its creditors more than the value of their original claims, according to a report by the Financial Times. The imploded crypto exchange is expected to pay former customers between 120-140% of the value of their holdings on the day FTX filed for bankruptcy in November 2022.
This increase in payouts is attributed to the surge in crypto prices and FTX’s 8% stake in the AI safety and research company Anthropic. The bankrupt exchange’s administrators are planning to sell two-thirds of the Anthropic stake to a group of investors for $884 million.
However, the size of creditor repayments is contingent on the U.S. Internal Revenue Service’s demand for $24 billion in unpaid taxes. FTX’s legal team has argued that the exchange owes no taxes to the IRS as it consistently recorded losses over its three-year lifespan.
Former FTX founder Sam Bankman-Fried, who was found guilty of defrauding investors and mishandling customer funds, faces a recommended prison sentence of 40-50 years. His lawyers are pushing for a maximum sentence of 6.5 years, citing the size of creditor repayments as a mitigating factor.
The news of FTX’s potential creditor payouts has garnered significant attention in the crypto community, with many eagerly awaiting the final resolution of the bankruptcy proceedings. Stay tuned for more updates on this developing story.
