- FTX’s bankruptcy estate has announced that creditors and customers are likely to receive between $14.5 billion to $16.3 billion in total compensation.
- However, this does not include payouts for holders of FTX’s ill-fated FTT token, which are to be “canceled or released”.
- Meanwhile, those with NFTs currently trapped in the FTX NFT platform due to the company’s collapse are set to receive the assets back.
FTX’s bankruptcy estate has revealed a compensation plan for creditors and customers, but holders of the ill-fated FTT token are left out. Meanwhile, trapped NFTs are set to be returned to their owners.
Details of the Compensation Plan
The plan, filed in Delaware bankruptcy court, states that around 98% of FTX creditors with allowed claims less than $50,000 will receive 118% of what they’re owed if the plan receives court approval. This payment represents a little interest on top of funds customers lost 18 months ago when crypto prices were broadly much lower than they are now. Creditors and customers who lost FTT in FTX’s collapse were previously set to receive cash payments based on their holdings, according to an FTX reorganization plan filed last December. The plan also stipulates that NFT-related claims would see their corresponding JPEGs returned.
FTX Founder’s Misdeeds
FTX founder and former CEO Sam Bankman-Fried was handed a 25-year prison sentence in March for stealing $8 billion from customers, among other misdeeds. The disgraced crypto wunderkind secretly siphoned billions of dollars from the exchange to purchase Bahamian real estate, bankroll venture investments, and amass influence through political donations. Most of Bankman-Fried’s wealth, which topped out at an estimated $26.5 billion, was made up of ownership in FTX and FTT, per Bankman-Fried’s profile on Forbes.
Impact on NFTs and FTT’s Collapse
Among the NFTs impacted by FTX’s collapse are Solana NFTs minted by the platform itself, including those offered by concert festivals Coachella and Tomorrowland, NBA star Steph Curry’s 2974 NFT collection, and Formula One-themed NFTs from the Mercedes-AMG Petronas racing team. FTT’s collapse is synonymous with the fatal tailspin that wrecked FTX in November 2022. A report from CoinDesk revealed that Alameda Research, a trading firm owned by Bankman-Fried, held $4 billion worth of FTT on its balance sheet at the time.
Conclusion
FTX’s bankruptcy has had a significant impact on the crypto market, particularly for holders of its FTT token and NFTs. While the compensation plan offers some relief for creditors and customers, the full extent of the damage caused by FTX’s collapse is yet to be fully realized. The case serves as a stark reminder of the risks inherent in the crypto market and the importance of regulatory oversight.
