FTX will return the funds to its clients


FTX is preparing to return its clients’ funds, but don’t get too excited.

Amid the scandal surrounding the debacle of the Sam Bankman-Fried-led empire, some FTX subsidiaries have begun giving guidance on how they will return funds to affected clients.

The FTX scandal erupts in the news daily, not only because of the scale of the fraud, but also because of the legal situation of its top executives. And as bankruptcy proceedings progress and the list of creditors grows, some customers affected by their funds being held are already excited to start claiming them.

Is it true that FTX will return the funds to its clients?

FTX Japan, for example, has reported that it expects to begin the process of returning assets to its clients in mid-February. The subsidiary of the cryptocurrency exchange explained that the repayment of the funds will take place through Liquid Japan, another crypto company that Sam Bankman-Fried’s company had purchased this year to strengthen its presence on Japanese soil.

According to the company, customers who are eligible for a refund will be notified in January and will need to create an account on the aforementioned platform. Once this step is completed and the estimated date arrives, they will be able to perform the corresponding extraction.

The Japanese branch of FTX announced that it has $46 million in fiat money and the equivalent of $94.5 million in cryptocurrency. Very small numbers compared to those that disappeared from the Bahamian company’s coffers. It suggests that the number of customers affected by the company’s debacle in the Asian country is significantly lower than in other countries; which would also explain the “velocity” of asset returns.

READ
The Spanish accommodation app, Central de Reservas, will allow payments with Bitcoin

FTX Japan will begin returning client funds in February

The case of FTX Japan is certainly a rarity in the legal context of the parent company. Clients of the cryptocurrency exchange based in other parts of the world will surely have to wait a long time before regaining control of their assets.

Though there seems to be a glimmer of hope for FTX clients and lenders in the Bahamas as well. The entity operating on the island, formally known as FTX Digital, has transferred all of the company’s cryptocurrencies to wallets that are under the control of the Bahamian Securities and Exchange Commission.

It happened in November, right after the company filed for bankruptcy. At present, it is unknown whether Ryan Salame, co-CEO of the subsidiary, was related to said move. Let’s not forget that prior to FTX’s bankruptcy, the aforementioned CEO criticized Sam Bankman-Fried for his actions with Bahamian regulators.

Reuters reports that the island’s securities commission today oversees about $3.5 billion in assets. It is the authority’s intention to keep them temporarily and then return them to their owners. However, it is not yet known when that reintroduction will take place.

A long way to go for FTX to return funds to its clients


Everything indicates that the process will be long and complicated. FTX’s bankruptcy managers have been highly critical of the actions of SBF and its employees. And the US authorities accuse them of having carried out a fraud “of epic proportions”.

Gary Wang, co-founder of FTX, and Caroline Ellison, former CEO of Alameda Research, have already pleaded guilty to fraud and conspiracy and could spend the rest of their lives in prison. Sam Bankman-Fried is expected to do the same next week, in a hearing scheduled for January 3. The entrepreneur is today locked up in his parents’ house in California, after having obtained a bail of 250 million dollars.

READ
How to keep my cryptocurrencies safe?

Posted

in

by