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FTX bankruptcy team has ‘strategy’ to fully repay customers

FTX bankruptcy team has ‘strategy’ to fully repay customers
Snapshot
FTX bankruptcy team has clawed back billions and is not finished.
By
Mike Millard
  • FTX expects to make customers whole.
  • Survey says most institutional traders avoid crypto.
  • Hong Kong warns on imposter crypto exchange.

FTX expects to fully repay customers

FTX bankruptcy lawyers plan to fully repay the collapsed crypto exchange’s customers, CNBC reported, citing attorney Andrew Dietderich, who said the legal team has a “strategy to achieve it.”

FTX’s new CEO, John Ray III, and his restructuring team have been clawing back assets following the company’s November 2022 collapse, when about $10 billion in customer funds went missing. So far, they have amassed more than $7 billion.

They have also decided not to restart the company, but to focus instead on repaying its users, the report said.

One positive factor is the value of Bitcoin, which was trading at about $16,000 when FTX entered bankruptcy and today is hovering around $48,000. FTX’s Bitcoin stash is now valued at more than $1 billion. Holdings of Solana and other coins have also done well, according to CNBC.

Another added value is that some FTX investments have done well. For example, the exchange invested $500 million in AI startup Anthropic in 2021, which may be worth almost three times that now.

Still, FTX customers being fully repaid means receiving the cash value of their investments in November 2022, not the higher valuations they might have reached in today’s market, a judge has ruled.

The report noted that if FTX customers are repaid it may be helpful for former CEO Sam Bankman-Fried, who faces the possibility of life in prison when he is sentenced March 28, after being found guilty in November on seven criminal counts.

JPMorgan survey: 78% of institutional traders avoid crypto

JPMorgan’s 2024 e-Trading survey showed that 78% of 4,000 institutional traders queried don’t plan to trade crypto in the next five years. That was up from 72% in 2023.

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Currently, about 9% are trading crypto, up from 8% the previous year.

Artificial intelligence/machine learning was seen as the most influential technology in shaping the future of trading over the next three years by 61% of respondents, an 8% increase since last year.

Blockchain/distributed ledger technology decreased in importance to 7% from 12% the previous year, according to the survey.

Hong Kong warns on imposter crypto exchange

Hong Kong’s Securities and Futures Commission warned of a fraudulent entity imitating crypto exchange MEXC.

The imposter has allegedly enticed victims to join social media or instant messaging chat groups on the pretence of offering free investment advice.

On the chat groups, victims have been referred to false websites and asked to deposit funds into designated bank accounts for investment purposes, after which they reported difficulties withdrawing funds.

Crypto market movers

  • Bitcoin is up 0.83% today at $48,16010.
  • Ethereum is up 0.91% today at $2,521.48.

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