FTX has decided to repay its customers in full. According to Bloomberg reports, the bankrupt cryptocurrency exchange informed the bankruptcy judge that creditors and customers who can demonstrate their losses will probably be refunded with the full amount.
FTX discards plans to restart the crypto exchange
After two years of struggling to reach an agreement, FTX has finally decided to pay for all the losses incurred by its customers.
During a court hearing on Wednesday in Wilmington, FTX’s attorney Andrew Dietderich stated that restructuring advisers would have to go through each of the millions of claims that have been made. This would precisely help eliminate those that are not genuine.
According to Reuters reports, FTX has retrieved over $7 billion in assets to repay its customers. Additionally, it has made agreements with different government agencies, who have committed to hold off on pursuing collection on around $9 billion in claims until after customers have been fully refunded.
However, FTX seems to have no plans to resume the crypto exchange as it is looking to liquidate all its assets.
Will FTX customers be happy with the settlement?
Following its collapse in 2022, FTX has persistently endeavored to reach agreements with its previous clientele. But a tug of war has always been the point of friction between the two parties. Previously, reports suggested that FTX was planning to offload its crypto assets to repay its customers.
However, former users of the now-defunct platform had already begged the judges to change the conditions of their reimbursement. Former FTX users argued that the new rules unfairly prevented from recovering their money. The argument also included investors not being able to take advantage of a year-long increase in the value of virtual assets. However current Reuters reports suggest that FTX will be valuing the losses made by customers by the value of cryptocurrency back in 2022. This can result in a huge disappointment among customers.
FTX collapse aftermath
The FTX meltdown had a knock-on impact that extended to other financial markets. Following the crash, the stock market continued to trade in the red for weeks. Even investor confidence deteriorated for a while after the collapse. Today’s decision to completely liquidate the company could be sad news to the market. However, it does bring an end to a two-year-long saga of speculations for former customers.
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