In a stark contrast to Sam Bankman-Fried‘s assertions last January, recent developments suggest FTX customers face a long wait for potential repayments.
What Happened: TV host Ran Neuner has shed light on the protracted timeline for FTX distributions, which are now expected to extend well into 2024 and possibly 2025.
According to Neuner, a crucial court hearing is scheduled for Oct. 7 to confirm FTX’s Chapter 11 reorganization plan.
If approved, this will set the stage for repayments to begin.
However, distributions would only start within 60 days of the plan becoming effective, and initially only for claimants owed less than $50,000.
Larger claimants may not see distributions until Q1 2025 at the earliest.
Why It Matters: This timeline stands in sharp relief to the statements made by Bankman-Fried in January 2023, just days after his release on a $250 million bond.
At that time, the former FTX CEO took to social media to deny allegations of misappropriating user funds and criticize Binance CEO Changpeng Zhao for an alleged campaign against his exchange.
“I didn’t steal funds, and I certainly didn’t stash billions away,” Bankman-Fried had claimed, asserting that the majority of his possessions were still being used to support FTX’s customers.
He also stated that both FTX International and Alameda were “legitimately and independently profitable businesses in 2021, each making billions.”
Bankman-Fried had further alleged that Alameda fell victim to a “targeted attack” after implementing substantial hedges, which ultimately led to FTX’s downfall.
He expressed frustration that FTX US users hadn’t been “made whole,” claiming the entity had $350 million in net cash when he departed.
Now, as the repayment process stretches into the future, these past claims serve as a reminder of the complex and often contentious nature of cryptocurrency bankruptcies.
The extended timeline for customer repayments underscores the challenges in resolving such high-profile collapses in the crypto industry.
What’s Next: This ongoing saga is likely to be a focal point at Benzinga’s Future of Digital Assets event on Nov. 19, where industry experts may dissect the FTX case, its implications for regulatory frameworks and the future of customer protection in the crypto space.
Read Next:
Some elements of this story were previously reported by Benzinga and it has been updated.
Image created using artificial intelligence with Midjourney.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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