FTX Scraps Plans To Revive Exchange, Will Repay Billions To Customers (theguardian.com) 24
A lawyer for FTX said the defunct crypto exchange has abandoned its plans to relaunch, instead opting to liquidate all assets and return funds to customers. The Guardian reports: The exchange, founded by Sam Bankman-Fried, has been negotiating for months with potential bidders and investors, but none were willing to put in enough money to rebuild it, FTX attorney Andy Dietderich said at a bankruptcy court hearing in Delaware. The failed negotiations underscored the fact that FTX was never what it appeared to be, and that Bankman-Fried never built the underlying technology or administration necessary to run the company as a viable business, Dietderich said.
Bankman-Fried has been convicted on fraud charges related to his operation of FTX. He faces decades in prison. "FTX was an irresponsible sham created by a convicted felon," Dietderich said. "The costs and risks of creating a viable exchange from what Mr Bankman-Fried left in a dumpster were simply too high." The company will instead focus on liquidating its assets to repay customers whose cryptocurrency deposits were locked when the company filed for bankruptcy in November 2022. FTX has recovered over $7 billion in assets to repay customers, and it has reached agreements with government regulators who have agreed to wait until customers are fully repaid before attempting to collect on about $9 billion in claims, Dietderich said. While FTX plans to repay its customers, the exchange will calculate their repayment based on cryptocurrency prices from November 2022, when the crypto market was suffering a prolonged slump. "The price of bitcoin has risen to about $43,300 from its November 2022 price of $16,872," notes the report.
Bankman-Fried has been convicted on fraud charges related to his operation of FTX. He faces decades in prison. "FTX was an irresponsible sham created by a convicted felon," Dietderich said. "The costs and risks of creating a viable exchange from what Mr Bankman-Fried left in a dumpster were simply too high." The company will instead focus on liquidating its assets to repay customers whose cryptocurrency deposits were locked when the company filed for bankruptcy in November 2022. FTX has recovered over $7 billion in assets to repay customers, and it has reached agreements with government regulators who have agreed to wait until customers are fully repaid before attempting to collect on about $9 billion in claims, Dietderich said. While FTX plans to repay its customers, the exchange will calculate their repayment based on cryptocurrency prices from November 2022, when the crypto market was suffering a prolonged slump. "The price of bitcoin has risen to about $43,300 from its November 2022 price of $16,872," notes the report.
Billions of...dollars? (Score:2)
What? The customers who were affected by the company's shenanigans don't want their actual cryptocurrency back? Hmmm...
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That's the best hope investors will have for mitigating their losses, compared to the pennies per $10000 they will get from the liquidation.
Re: Billions of...dollars? (Score:2)
They have $7BN in seized assets and about $9BN in claims against FTX, so it looks like 'investors' will be repaid at roughly 7/9th of their Oct 2022 account valuation.
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Actually, the lawyers will take their half first.
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And after the lawyers have taken their share, they'll have roughly $7 and about $9 left to distribute to the dupes, sorry, "investors".
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BTW it's worth noting that cryptocurrency was designed to work around the banking system, so the only protection FTX customers have is a bankruptcy claim. So, the price of the assets is determined at the time of bankruptcy
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You do realize this is slashdot, right? Who reads articles around here! But on your recommendation, I did. The only reference I saw regarding what customers "wanted" was this:
Dozens of customers have complained that they are being shortchanged by the use of November 2022 prices
These customers weren't actually asking for the Bitcoin itself, but for the amount of money (dollars) that that Bitcoin would now be worth.
It's ironic that, as you say, cryptocurrency is designed to work around the banking system and its regulations. But now these same people who owned crypto, want the government system to bail them ou
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These customers weren't actually asking for the Bitcoin itself, but for the amount of money (dollars) that that Bitcoin would now be worth.
How presumptuous of them to assume they wouldn't have panic sold or re-invested their Bitcoin in some other brand new doomed shitcoin (or *gag* NFTs) in the interim. Making dumb extremely high-risk "investment" choices (remember Mt. Gox? Pepperidge Farm does.) should be financially painful; they're lucky if they get anything back.
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Does it really matter (if it's actual Bitcoins or the amount of money in USD those Bitcoins would be worth with current prices)? It's the same value, I am sure customers would've been fine with either, their problem is that they are going to get the November 2022 price. This is a side-effect of having an asset pretend to be currency: the law doesn't care about someo
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Does it really matter (if it's actual Bitcoins or the amount of money in USD those Bitcoins would be worth with current prices)?
It depends on why you're in bitcoin. If you're in it to escape government oversite, then yes, it absolutely matters. Having to convert to dollars by definition incurs government surveillance and regulation (especially if the amount is over $10,000, since banks are required to report all such transactions to the Fed).
If you're in it purely as a kind of investment, then no, it doesn't matter at all.
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BTW the only way to have anonymous cryptocurrency is to create a wallet yourself using l
so how many (Score:2)
Re: so how many (Score:1)
Where do you imagine that 'interest, lots of interest' will come from? All the assets were seized, and apparently amount to $7BN, and they have investors looking for $9BN - I guess that means they'll get 7/9th of their investments back...
While FTX plans to repay its customers, the exchange will calculate their repayment based on cryptocurrency prices from November 2022, when the crypto market was suffering a prolonged slump. "The price of bitcoin has risen to about $43,300 from its November 2022 price of $16,872," notes the report.
Out of curiousity, if the investments all tanked after being seized by gov't officials, would investors demand the current (tanked) valuation, or the 2022 valuation?
Giving them the Oct 2022 valuation is fair, and once everyone is paid off at that value, the regulators can
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You assume that they wouldn't have held for a while and sold at a higher value if they had access to their bitcoin. We can't assume that they would have correctly sold high, but we also can't assume that they would have sold that day if they could.
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Point of order (Score:2)
"FTX was an irresponsible sham created by a convicted felon,""
SBF was not a convicted felon when he created FTX.
He is now a convicted felon because he created an irresponsible sham.
I wonder what the prison time will be? 50 years? Let him out when he's 80?
I have the same question about the unfortunate looking girlfriend. By the way, don't look for a picture of her mother. Out of curiosity I did, and I regret it.