Creditors of the defunct crypto exchange FTX are set to receive a total of $1.6 billion in bankruptcy repayments by September 30, 2025. This marks the third round of distributions aimed at compensating former clients who lost money when FTX declared bankruptcy in November 2022 due to poor management practices. The FTX Recovery Trust confirmed these payments, which will be dispersed through crypto platforms Bitgo and Kraken, as well as the payments service Payoneer.
This distribution will benefit four different groups of creditors, with the amounts ranging between 78% and 120% of their initial holdings at the time of the exchange’s collapse. The plan to recompense clients was initially announced last year, following the chaotic failure of the FTX organization under its former CEO Sam Bankman-Fried, who is now serving a lengthy prison sentence for fraud.
Bankman-Fried mismanaged the exchange by allocating customer funds to cover losses from risky bets made by his hedge fund, Alameda Research. This mismanagement is said to be one of the most significant financial frauds in American history, surpassing even the notorious Enron scandal. Bankman-Fried was arrested and charged with multiple crimes, with key associates of his testifying against him during the trial.
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