FTX Will Repay Customers, But Won't Reopen Exchange

Written by

Eddie Mitchell

Cryptocurrency Writer

Following failed negotiations, embattled crypto exchange FTX has scrapped plans to revive the firm, and will be focusing on liquidating assets and repaying customers in full, it's been reported this week.

Repayment terms

In a recent court hearing at a Delaware bankruptcy court, FTX will now focus on repaying the nine million customers it had misled through further asset liquidations. So far, FTX has managed to recover more than $7billion to repay customers.

FTX tweet

According to the court hearing on Wednesday, FTX customers may now expect to receive their repayment in full. This comes after customers were told that they would not be receiving their lost crypto assets, but instead be receiving a dollar-equivalent repayment based on the value of their assets at the time FTX declared bankruptcy in November 2022.

This has left a bitter taste in the mouth of investors, who, earlier this month, filed a formal complaint to the court, appealing that they are being short-changed, especially considering the performance of Bitcoin (BTC) and other cryptocurrencies since then.

During the hearing, FTX attorney Andy Dietderich cautioned investors on the outcome, saying: “I would like the court and stakeholders to understand this not as a guarantee, but as an objective,” Adding, “There is still a great amount of work, and risk, between us and that result. But we believe the objective is within reach and we have a strategy to achieve it.”

The US bankruptcy court is considering a repayment process where claimants would need to submit proof that they held and lost assets on FTX, and this could be a lengthy process. As pointed out by Dietderich, restructuring advisers will now be required to examine and filter millions of claims to determine which ones are legitimate.

No comeback for FTX

The FTX exchange has spent months negotiating with potential investors to see if enough capital can be raised to make the now-defunct exchange operational again, but it seems as though no one is interested.

Dietderich noted that “the costs and risks of creating a viable exchange from what Mr. Bankman-Fried left in the dumpster were simply too high,” and these failed negotiations are of no surprise given that founder Sam-Bankman Fried hadn’t established basic the infrastructure to operate a viable business.

"FTX was an irresponsible sham created by a convicted felon," Dietderich said.

FTX Token (FTT) price

Naturally, the markets responded to the news, pushing the FTT token down by over 11% in the last 24-hour period. The FTT token now sits at $1.90, down from its all-time high of $85 in 2021.

FTT daily chart