FTX crypto holders may recover only 10-25% of lost assets. Repayments based on petition date prices, frustrated creditors.
Only FTX crypto holders are expected to recover 10-25% of their lost assets According to recent court documents shared by self-proclaimed FTX lender activist Sunil Kavuri.
The documents revealed that FTX will transfer 18% of the forfeited funds from the US Department of Justice to a special “Preferred Shareholder Relief Fund”.
The $230 million capped fund will compensate FTX's preferred shareholders — investors who owned equity before the company's collapse.
While these stakeholders are benefiting, many FTX crypto holders are frustrated because their recoveries are so small.
In response to his post, one user echoed the sentiment: “Shame, we are Cheated twice!“
Kavuri also indicated that repayments would be calculated based on asset prices at the time of FTX's bankruptcy filing. For example, Bitcoin was worth around $16,000 at the time compared to its current value of $65,000, while Solana was valued at $17, well below the current price of $160.
In August, FTX and its subsidiary Alameda Research were ordered to pay $12.7 billion to fraud victims.
It was revealed that the company had misused customer funds for personal investments and political donations, leading to its collapse in late 2022.
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Founder Sam Bankman-Fried was sentenced to 25 years in prison for his role in the massive $11 billion fraud.
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