- Rumours have been floating crypto social media that defunct exchange FTX is planning to repay victims of its billion-dollar collapse as soon as tomorrow.
- However, according to official documents, FTX’s legal team is set to attend a court hearing on October 7th to finalise aspects of its repayment plan.
- Therefore, FTX will not be repaying customers before this date.
- It is expected for compensation to begin by the end of 2024 for smaller creditors, while larger investors and institutions will have to wait until next year to start seeing repayments.
The dust is finally beginning to settle, nearly two years since the calamitous collapse of crypto exchange FTX caused billions in customer losses. As legal proceedings near their end – with SBF behind bars – all that remains is for the final repayment distribution to be settled.
But some on social media have jumped the game, spreading rumours that FTX customers will begin seeing money in their crypto wallets as soon as tomorrow. Despite no real evidence to support this claim, it has circled far and wide across the community.
So what’s really going on with FTX?
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FTX is Not Repaying Customers This Week
It is technically impossible for the FTX repayments to begin this week, simply because the court hearing outlining the process has yet to conclude. According to FTX’s Chapter 11 Bankruptcy filing, a court date is scheduled for October 7th, 2024 – over a week away.
The next day in front of Judge John T. Dorsey will be a big deal for FTX’s lawyers, as it will finally set in stone whether their current bankruptcy restructuring plan will be approved.
If Judge Dorsey gives FTX the greenlight, victims with balances of under approximately US $50k (AU $72k) –at the time of hacking – could see compensation before the year is out.
However, higher-profile investors and institutions will be waiting until at least 2025 before they see a cent from the defunct exchange.
With billions expected to be repaid, the crypto market (or associated funds) is expecting a spike in inflows once payouts begin.
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Creditors Unhappy with Repayment Conditions
Not everyone is happy with the current repayment schedule, with some victims arguing they should be paid in-kind, rather than with cash equivalent.
There are two major issues with this, according to some creditors.
Firstly, the cash value of lost assets will be based on the time FTX filed for bankruptcy – when BTC was worth only US $16k (AU $23k). This is a significant opportunity cost for investors who may have held onto their crypto portfolios and seen gains of 200%+.
Additionally, receiving cash for crypto can be seen as a disposal event, and thus becomes taxable in several jurisdictions. Again, those that planned to HODL their portfolios are drawing the short end of the stick.
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