On October 31st, Sam Bankman-Fried (SBF), the founder of FTX, released a report titled “FTX: Where Did The Money Go?”, indicating that the customers of the cryptocurrency exchange FTX are anticipated to receive a payment in US dollars that ranges from 119% to 143% of their principal. This implies that all creditors will “fully recover” their funds. FTX was never truly bankrupt, and the funds were sufficient at the time of the bankruptcy. According to the data, the total assets of FTX at the time of filing for bankruptcy in November 2022 were approximately $15 billion, including cash, crypto assets, investments, and real estate. This amount was sufficient to cover the customers’ debt of about $8 billion. The significant problem that FTX faced at that time was liquidity stress rather than asset insolvency. If it had not been forced into receivership, the company’s original system could have resumed withdrawals and operations within that year. Since the bankruptcy, legal and advisory fees have accumulated to more than $1 billion. More importantly, customer payments were calculated in US dollar equivalents based on the coin price in November 2022. For example, Bitcoin was around $17,000 at that time, while the current price has exceeded $100,000. Although customers were nominally compensated “excessively”, they actually missed out on two years of market gains. If FTX had not gone bankrupt and still held the original assets to this day, the overall asset value would have exceeded $130 billion, and shareholder equity would have reached $110 billion. In contrast, current shareholders can only recover about 10% of their invested capital, and the company’s valuation is nearly zero.
