FTX’s liquidators are trying to claw back SBF’s donations made with customer funds. Customers are trying to get their funds back by starting GoFundMe pages. And politicians are returning the money.
Billions of dollars in customer funds and investor valuations were wiped out when Sam Bankman-Fried’s crypto exchange, FTX, collapsed in November after it was revealed to be a massive fraud. A lot of that money isn’t coming back, like the funds SBF routed to his investment firm, Alameda Research, which were then wasted on bad bets. But there’s still a lot of cash out there waiting to be recovered.
As the alleged fraudster is extradited to the U.S. from the Bahamas to face charges, three concurrent fights are brewing over funds either controlled by FTX or invested by SBF. Below is a look at the battle for the money that wasn’t incinerated in FTX’s spontaneous combustion.
In one of its first court filings since declaring bankruptcy, FTX acknowledged that it had as many as 1 million creditors, with losses north of $8 billion. Some of the more desperate of that group — small investors who say their life savings was lost through no fault of their own — have set up GoFundMe pages to recoup their losses.
The most likely route for FTX customers to get their cash back is through the bankruptcy process, in which a judge will determine how much will be given out during restructuring. This process will see FTX liquidated, with experts determining how to hand out the remaining funds after bankruptcy costs. It is expected to take years, and individual account owners will be paid out last. “People are going to be waiting on the sidelines for a very long time, and only Heaven knows what it’s going to be worth,” St.
