Benzinga - by Benzinga Neuro, Benzinga Staff Writer.
Bankrupt cryptocurrency exchange FTX’s recent announcement of reimbursing its customers in full with interest has drawn mixed reactions.
What Happened: CNBC reported Mackenzie Sigalos pointed out that while FTX plans to pay back its customers, many are unhappy due to the freezing of the value of their crypto assets back in November 2022, during the bear market.
During CNBC’s “Last Call” on Wednesday, Sigalos pointed out that customers will be reimbursed based on the value of their assets at the time of the bankruptcy, not their current value.
“Bitcoin was trading at $17,043 on the day the FTX filed for bankruptcy. If you own just one Bitcoin (CRYPTO: BTC) that day, under this proposed bankruptcy plan, you would get 118% of that back, that is 20K [$20,000]. And today, bitcoin is trading at $62,000. That’s a big difference,” she explained.
FTX says most of its customers will get all their money back but many are unhappy."The main problem here is that the bankruptcy estate froze the value of customer crypto assets back in November of 2022," says @KenzieSigalos. "We're talking about the bottom of the bear market." pic.twitter.com/nK3dxRuCQb
— Last Call (@LastCallCNBC) May 8, 2024
Why It Matters: FTX, the cryptocurrency exchange that filed for bankruptcy in November 2022, has managed to accumulate a substantial cash reserve, allowing it to fully reimburse its customers.
The company, now under the leadership of CEO John Ray, is set to distribute as much as $16.3 billion in cash among its creditors, which amounts to about $5.3 billion more than what is owed.
Earlier, FTX’s founder, Sam Bankman-Fried, reached a tentative agreement with a group of defrauded customers. The agreement, pending judicial approval, stipulates that the plaintiffs will withdraw their class action lawsuit against Bankman-Fried, who in return will aid their ongoing legal actions against various celebrity endorsers of the now-defunct cryptocurrency exchange.
Price Action: On Thursday, Bitcoin was trading 1.76% lower at $61,295.70 at the time of writing, according to Benzinga Pro.
Read Next: Bitcoin, Ethereum, Dogecoin Trade Sideways, Trader Asks: ‘Does It Matter If You Buy Bitcoin At $62,000 Or $58,000’?
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