After thorough investigations, reports have revealed a significant amount of funds missing from FTX customer assets. Following this, FTX Trading Ltd and its associated list of debtors have come together to propose a settlement that would see the majority of lost crypto and financial assets refunded back to customers.
FTX Customers Set To Regain Lost Assets
On Monday, October 16, FTX debtors agreed to settle its pending Chapter 11 court case, “Customer Shortfall Case.” The bankrupt crypto exchange proposed a resolution, offering FTX customers more than 90% of their missing assets toward the end of Q2 2024. FTX debtors have also put forward a $9 billion reimbursement for FTX.com and another $166 million for FTX.US.
The filing, which is set for December 16, 2023, will see FTX debtors segregating their assets into three distinct portions. One of the portions would hold assets for the benefit of FTX.com, the second portion would be focused on FTX.US, while the third part would be a general pool for any other asset.
According to a post from FTX’s official X (formerly Twitter) account, the proposal may be poised to be approved by the Bankruptcy Court to enable victims of the crypto exchange failure to be favorably compensated.
“If approved by the Bankruptcy Court, the settlement will create a special ‘Shortfall Claim’ to benefit customers, as previously proposed by the FTX Debtors in July, and facilitate an offer to eligible customers to settle customer preference exposure at an agreed amount,” the post read.
The Chief Executive Officer and Chief Restructuring Officer of the FTX Debtors, John J. Ray III, embraced the newest development and improvement in the FTX case. He stated that he was elated to see victims of the FTX debacle recompensed and showed appreciation to the independent Board of Directors supervising the case.
“Together, starting in the most challenging financial disaster I have seen, the debtors and their creditors have created enormous value from a situation that easily could have been a near-total loss for customers,” Ray said.
He added that he “would especially like to recognize the important role of the independent Board of Directors who quickly responded to the call to duty at a time of crisis.”
FTT token struggles as exchange's woes continue | Source: FTTUSDT on Tradingview.com
FTX Executive Speaks On Customer Missing Funds
An FTX Deputy, Nishad Singh who is a prime witness in the fraud trial of FTX founder Sam Bankman-Fried, has revealed in a New York court that he was aware of the billions of dollars of missing customer funds.
Singh stated that he had accosted Bankman-Fried about the missing customer assets allegedly misappropriated from the crypto exchange to Alameda Research, a crypto trading firm co-founded by Bankman-Fried.
According to a crypto-journalist on X, Singh stated that he had been worried about the former FTX CEO’s lavish lifestyle. The executive also suggested that Bankman-Fried was fully aware of the holes in accounting in terms of customer funds.
He told the court that he had attempted to officially resign from the crypto exchange, but was coaxed by Sam Bankman-Fried to continue working and try to recuperate some of the lost customer funds.
Singh has since pleaded guilty to accusations of fraud and is currently working with prosecutors in the Sam Bankman-Fried trial with the goal of receiving a lower sentence. In contrast, Bankman Fried has pleaded not guilty and is making efforts to contend his innocence to the court.
Featured image from CNBC, chart from Tradingview.com