Victims of the FTX crypto fraud will be reimbursed with their funds, along with additional interest

Bankruptcy lawyers representing customers affected by the cryptocurrency exchange FTX’s collapse 17 months ago announced that most victims will receive their money back, along with interest.

The development follows the conviction of FTX’s co-founder and former CEO, Sam Bankman-Fried (SBF), who was found guilty on seven counts including fraud, conspiracy, and money laundering. Customers had approximately $8 billion in funds go missing. In March, SBF received a 25-year prison sentence and was ordered to forfeit $11 billion. He filed an appeal last month, which could prolong the legal proceedings for years.


After filing for bankruptcy in late 2022, Sam Bankman-Fried (SBF) stepped down and U.S. attorney John J. Ray III was appointed as CEO and chief restructuring officer to oversee FTX’s reorganization. Upon assuming the role, Ray expressed distrust in the organization’s prior audits. Subsequently, he and his team began the process of tracing the missing funds, which were found to have been invested in real estate, political donations, and venture capital, including a $500 million stake in AI company Anthropic.

Initially, prospects for investors recovering their funds seemed bleak. However, recent months have seen progress in reclaiming cash from FTX’s investments and executives. Now, it has been revealed that 98% of FTX creditors will receive 118% of the value of their assets in cash, while other creditors will receive 100%, along with additional compensation for the time value of their investments. The FTX estate plans to distribute between $14.5 billion and $16.3 billion in cash, including assets controlled by chapter 11 debtors, liquidators, the Securities Commission of the Bahamas, and the U.S. Department of Justice.

The reorganization plan, which requires approval from the bankruptcy court, aims to settle all disputes with stakeholders and the government without prolonged litigation. Notably, creditors will not benefit from the appreciation in Bitcoin and Ethereum values since FTX’s bankruptcy filing, as the tokens held were significantly less than customers believed.