The failed cryptocurrency exchange FTX would begin returning the money owed to its users as soon as the end of 2024, as long as the victims verify their identities and that they were really affected by the case. This is shown in the minutes of the first meeting of creditors of FTX Digital Markets, the Bahamian arm of the firm founded by SBF, who was sentenced last week to 25 years in prison.
“The debtors have the shared objective of making the first provisional distribution (of funds) by the end of 2024 to creditors with admitted claims and satisfactory KYC documentation,” says the letter signed by lawyer Peter Greaves, joint official liquidator of FTX Digital Markets.
According to the liquidators, Customers have until May 15, 2024 to present their claims. However, they estimate that the period will extend at least until June. As detailed by the liquidation lawyers, the process to finally return the funds consists of the registration and linking of client accounts, as well as the acceptance of balances and presentation of proof of debt. Also, it depends on the adjudication of claims by the board of liquidators and the approval of the know-your-customer (KYC) and anti-money laundering (AML) process, which will be executed by the lawyers. Finally settlement of claims will proceed by the assets of FTX Digital Markets. According to the lawyers, the value of the clients' account balances to proceed with the return of funds, will be taken from November 11, 2022, when FTX filed for bankruptcy. However, they will allow any customer to dispute the value of their account by filing a claim and disputing the balance. Something that will be addressed “during the adjudication process,” say the liquidators of FTX Digital Markets.
Focused on claims, adjudications and conciliations
Right now, the FTX board of liquidators in the Bahamas will focus on claims submission, adjudication and claims conciliation. “As well as the assets of the debtors and resolve the voluntary participation election process and monetization of assets to maximize and accelerate distributions,” the lawyers say. FTX, which was once one of the largest bitcoin (BTC) and cryptocurrency exchanges on the market, fell from grace at the end of 2022, as a result of, among other things, financial crimes and mismanagement of company finances.
The headquarters of that company were located in the Bahamas, a country that suspended the operations of that company and appointed a board of liquidating lawyers. so that they could proceed with the return of the funds.
In the FTX case, the company's founder and former CEO, Sam Bankman-Fried, was sentenced to a quarter of a century behind bars for committing financial crimes. A sentence lower than that requested by US prosecutors, who requested 50 years for the 32-year-old businessman.