Fallen cryptocurrency exchange FTX has raked in billions of dollars more than it needs to fully pay back customers who lost funds in its November 2022 collapse.
In a rare twist versus typical US bankruptcy proceedings, FTX — whose downfall recently spurred a 25-year prison sentence for its former CEO Sam Bankman-Fried — also has enough money to cover interest, according to Bloomberg.
Once it finishes selling all of its assets, FTX will have as much as $16.3 billion in cash to distribute versus about $6.4 billion earlier this year, the company said in a statement.
The firm owes more than 2 million customers and other non-governmental creditors about $11 billion.
“In any bankruptcy, this is just an unbelievable result,” said FTX CEO, John Ray, who took over the firm when it collapsed.
Lower-ranking creditors traditionally receive just pennies on the dollar for their holdings in bankrupt companies, Bloomberg reported, but FTX has benefited from strong rallies in crypto tokens like Solana, which has been endorsed by Bankman-Fried.
Although FTX will pay its debts back in full, plus interest, there won’t be much left for equity holders, according to filed Tuesday evening in federal court in Wilmington, Del., reviewed by Bloomberg, which is where the FTX case is being handled.
In bankruptcy, company owners can’t collect anything until all debts have been paid in full
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