Customers of failed crypto firm set for refunds

Creditors of the collapsed cryptocurrency exchange FTX are poised to receive up to $16.5bn (£12.6bn) under a bankruptcy plan approved in the US on Monday.

The agreement will put an end to a saga that started when the firm went bankrupt in November 2022, leaving millions of customers around the world without access to their accounts.

Last year, former boss Sam Bankman-Fried was convicted of stealing customer funds ahead of the collapse and later sentenced to 25 years in prison.

The deal will allow former customers to recover a sum worth about 119% of what they had in their accounts at the time of bankruptcy, according to FTX.

Creditors are expected to receive their funds 60 days after the plan is declared effective. This date has yet to be agreed.

John J Ray III, the lawyer who was appointed to handle FTX’s bankruptcy process and its current chief executive, said the approval of the plan was a “significant milestone” in the firm’s efforts to repay the money to people and firms in more than 200 jurisdictions around the world.

“Looking ahead, we are poised to return 100% of bankruptcy claim amounts plus interest for non-governmental creditors through what will be the largest and most complex bankruptcy estate asset distribution in history,” he said in a statement.

When FTX declared bankruptcy in late 2022, roughly $8bn in customer funds were reported missing, not including debts to investors and others.

Mr Ray’s team has since recovered assets worth $14.7-$16.5bn, in part by selling off FTX’s remaining assets, such as its investment in the artificial intelligence firm Anthropic.

The deal reached with the bankruptcy court allows the firm to repay customers ahead of the other unsecured creditors such as the government.

It has drawn a mixed reception from some former customers, who have maintained that their crypto holdings would be worth far more today had they not been stolen.

The value of bitcoin has more than tripled since November 2022.