There's a possibility FTX customers get repaid in full after all

emorphy

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TL;DR: At first it appeared that the one million customers that lost their funds with the cryptocurrency exchange were flat out of luck. But some savvy investments, a rigorous clawback effort and the soaring price of Bitcoin have changed the story line.

We all know the sad (scam) story: When FTX's multibillion-dollar cryptocurrency exchange spiraled out of control and went bankrupt over the course of a matter of days in 2022, investigators quickly discovered roughly $10 billion in customer assets were missing.

As Bankman-Fried awaits his sentencing after being found guilty last November on seven criminal counts, it looks as though what he wrote in a Substack post in January 2023 may be true after all: Specifically, that FTX US "should be able to return all customers' funds."

But, how could this be? From the beginning it appeared that the reported one million FTX customers that lost their funds likely had lost them, or at least a good portion of them, forever. While some of the lost money was traced to be wasted in supporting an extravagant lifestyle by Bankman-Fried, another good portion of it was invested – investments that have appreciated significantly in the last two years. There are other factors as well – namely Bitcoin's remarkable recovery – all of which could mean potential good news for FTX's customers.

"We currently anticipate that we will have sufficient funds to pay all allowed customer and creditor claims in full," FTX lawyer Andrew Dietderich told the judge hearing the bankruptcy last week during a hearing.

Bankman-Fried has maintained that a substantial recovery for customers was possible as FTX US was fully solvent and that FTX International had many billions of dollars of assets. He claimed that when the new CEO John Ray III and the Chapter 11 team took over, FTX US had $350 million net cash on hand beyond customer balances and that those funds and customers were segregated from FTX International.

More significantly for the recovery efforts, Ray and his team have collected more than $7 billion clawing back Bankman-Fried's assets among other efforts. Those efforts included going after the millions given to K5 Global, which invested in companies like SpaceX.

Then there's the value of Bitcoin which has soared since its darker days of 2022 and is now trading above $47,000. Last September, the bankruptcy team reported that FTX had $3.4 billion worth of digital assets – with about $560 million in Bitcoin. That stash is currently valued at more than $1 billion. The September report also revealed that there was $1.1 billion invested in the Solana cryptocurrency and its price has also spiked by five times.

So the math is looking pretty good for FTX investors. Their only worry is the bankruptcy process itself, which can be unpredictable. As attorney Dietderich told the bankruptcy judge: "there is still a great amount of work and risk" for clients looking to be put whole, but the team has a "strategy to achieve it."

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Bitcon is a scam. Always has been, always will be. It's nothing more than a pump and dump pyramid scheme. Of course the price of it is "soaring" again, because the whales who invested heavily in it are doing everything they can to prop it up. Once it reaches a certain point they will start cashing out and the price will crash again. Rinse and repeat.

Don't worry though, we'll eventually hit that sweet spot I like to call the SSP (Sucker Saturation Point) where no more rubes will throw their money into the pot. When that happens mostly the whales will be left trying to con each other.

And don't forget, Bitcon is a zero sum game. There's nothing backing it. No products, no services, no work force, nothing. It's just a way to shuffle money away from the gullible. The only way YOU can make money is for someone else to lose money, period. If you made a million dollars on it then it means other people lost a million dollars.

Cue the Bitcon zealots who are convinced it's the greatest investment since tulip bulbs or beanie babies and it's a way for every "smart" investor to get rich quick. (Hint: it's mathematically impossible for everyone to make money on it.)
 
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Bitcon is a scam. Always has been, always will be. It's nothing more than a pump and dump pyramid scheme. Of course the price of it is "soaring" again, because the whales who invested heavily in it are doing everything they can to prop it up. Once it reaches a certain point they will start cashing out and the price will crash again. Rinse and repeat.

Don't worry though, we'll eventually hit that sweet spot I like to call the SSP (Sucker Saturation Point) where no more rubes will throw their money into the pot. When that happens mostly the whales will be left trying to con each other.

And don't forget, Bitcon is a zero sum game. There's nothing backing it. No products, no services, no work force, nothing. It's just a way to shuffle money away from the gullible. The only way YOU can make money is for someone else to lose money, period. If you made a million dollars on it then it means other people lost a million dollars.

Cue the Bitcon zealots who are convinced it's the greatest investment since tulip bulbs or beanie babies and it's a way for every "smart" investor to get rich quick. (Hint: it's mathematically impossible for everyone to make money on it.)
Oh, man, I can't wait until you figure out how "real" money works.
 
Oh, man, I can't wait until you figure out how "real" money works.

BTC is not even an asset. It hold no intrinsic value. When you buy a stock, you own a share of the company. When you own a BTC, you own what the market believe it is worth.

Since crypto is used by organized crime, BTC is holding the majority of it's value on their involvement.

On the moral standpoint, wasting energy on speculation is the definition of human insanity and greed.
 
BTC is not even an asset. It hold no intrinsic value. When you buy a stock, you own a share of the company. When you own a BTC, you own what the market believe it is worth.

Since crypto is used by organized crime, BTC is holding the majority of it's value on their involvement.

On the moral standpoint, wasting energy on speculation is the definition of human insanity and greed.
The world spends more money and creates more pollution for military purposes than the entire crypto market combined. But let's look at what prohibition does. Prohibition created the cartels, the US turned central and South America into what it is with the morale high ground. do you know what crypto allows people to do? It allows them to ignore other people's morale high ground.

Bitcoin isn't an asset as defined by the US government. What actually defines something as an asset is whether or not it has value to other people. So please, keep consuming what MSNBC or whatever propaganda network you enjoy tells you.

Now I have to explain my joke. The person who was criticizing bitcoin defined fiat currency completely by accident. The dollars, euros, yen, Chipotle gift cards, none of them have true value. Also, he called bitcoin a pyramid scheme. He very clearly has no idea what the definition of a pyramid scheme is.

But people being blind to how fiat currency works is what makes it work. Wait until I tell you about fractional reserve banking!
 
The world spends more money and creates more pollution for military purposes than the entire crypto market combined. But let's look at what prohibition does. Prohibition created the cartels, the US turned central and South America into what it is with the morale high ground. do you know what crypto allows people to do? It allows them to ignore other people's morale high ground.

Bitcoin isn't an asset as defined by the US government. What actually defines something as an asset is whether or not it has value to other people. So please, keep consuming what MSNBC or whatever propaganda network you enjoy tells you.

Now I have to explain my joke. The person who was criticizing bitcoin defined fiat currency completely by accident. The dollars, euros, yen, Chipotle gift cards, none of them have true value. Also, he called bitcoin a pyramid scheme. He very clearly has no idea what the definition of a pyramid scheme is.

But people being blind to how fiat currency works is what makes it work. Wait until I tell you about fractional reserve banking!
Don't bother wasting your time on someone so ignorant to do a little research.

Crypto can be manipulated, but probably will never be as manipulated as the stock market. Another rabbit hole to run down.

I'd rather hold bitcoin than any other currency. Besides maybe gold, but look how controlled that is in terms of prices now.
 
This video bears repeating, for anyone who thinks Crypto has "value"

Oh, man, I can't wait until you figure out how "real" money works.
"real" money has the backing of world governments, real world products you can buy, real tangible jobs you can work, the list goes on.

Crypto is based on nothing. The entire market is FLUSH with major scams and constant rugpulls. Last time I checked the cash in my bank account didnt vanish because someone decided to release MoonCoin(tm) then run off with the cash.

Crypto isnt a currency. It is an unregistered security.

Don't bother wasting your time on someone so ignorant to do a little research.

Crypto can be manipulated, but probably will never be as manipulated as the stock market. Another rabbit hole to run down.

I'd rather hold bitcoin than any other currency. Besides maybe gold, but look how controlled that is in terms of prices now.
My favorite part of the "MUH CRYPTO MUH GOLD" crowd is these people are constantly going on about how much these assets are worth.....in USD. Says a whole lot.
 
Oh, man, I can't wait until you figure out how "real" money works.
Nice try, but we've been down this road many times before. "Real" money is backed by SOMETHING, you know, a country's economy, etc. where as Bitcon is backed by NOTHING. The only thing behind Bitcon is people's desire to make a quick buck at the expense of someone else. That's it.
 
Bitcoin isn't an asset as defined by the US government. What actually defines something as an asset is whether or not it has value to other people. So please, keep consuming what MSNBC or whatever propaganda network you enjoy tells you.
Ah there we go, this is what it always comes down to, isn't it? Oh you're just listening to liberal propaganda. None of the news channels I watch ever mentions crypto or tells you to buy/not buy it. The only time they ever mention crypto is when a large number of people lose their money on it or it crashes to a fraction of its value.

Anyone with even the smallest amount of common sense can figure out crypto is a total scam. If you have a working brain you don't need anyone else to convince you of that.
 
Don't bother wasting your time on someone so ignorant to do a little research.

Crypto can be manipulated, but probably will never be as manipulated as the stock market. Another rabbit hole to run down.

I'd rather hold bitcoin than any other currency. Besides maybe gold, but look how controlled that is in terms of prices now.
The good old "stock market and currency are manipulated and you can't trust the gumment, so I'd rather hold crypto because it's so safe" strategy. I hope that works out for you. I wonder how many tin foil hats you'll be able to buy at your local store when society collapses.
 
Nice try, but we've been down this road many times before. "Real" money is backed by SOMETHING, you know, a country's economy, etc. where as Bitcon is backed by NOTHING. The only thing behind Bitcon is people's desire to make a quick buck at the expense of someone else. That's it.
Backed by nothing you say? Except a whole lot of computing power and more security than your banks. Bitcoin in cold storage is more secure than any of your funds in USD. Fact. But sure, go on about how much you know, while we all sit here knowing full well you know jack **** about the subject.
 
The funniest part is that most of the holders would flat out ask for payment in Crypto or just quickly invest it all back into crypto again.
 
The problem is not that they are getting money back, but that a scammer is going free, but if somebody from techspot stole $200000 of BTC they would spend 20yr in jail for fraud.
 
This is great news for all the suckers that lost their money. Now they can get some pennies back. Dream on being paid back in full though. A Ponzi atop of a Ponzi, who would have thought...
 
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Nice try, but we've been down this road many times before. "Real" money is backed by SOMETHING, you know, a country's economy, etc. where as Bitcon is backed by NOTHING. The only thing behind Bitcoin is people's desire to make a quick buck at the expense of someone else. That's it.

Fiat currency by definition is backed by trust. Your trust that you can exchange that currency for something else. Bitcoin and USD are both fiat currencies...to the extent they are similar in that regard. The similarities end there tho. For something to function as "money" or "currency" it needs to satisfy a few basic principles. It must be divisible (Bitcoin is), it must function as a unit of account (Bitcoin does this), and it must function as a store of value (Bitcoin falls flat on its face here). So Bitcoin or basically any other crypto currency could function as money in a basic sense. The reason is does not is that not enough people trust it...and why would they with swinging value like it does? @yRaz isn't wrong but neither are you, you're both right in different ways
 
Fiat currency by definition is backed by trust. Your trust that you can exchange that currency for something else. Bitcoin and USD are both fiat currencies...to the extent they are similar in that regard. The similarities end there tho. For something to function as "money" or "currency" it needs to satisfy a few basic principles. It must be divisible (Bitcoin is), it must function as a unit of account (Bitcoin does this), and it must function as a store of value (Bitcoin falls flat on its face here). So Bitcoin or basically any other crypto currency could function as money in a basic sense. The reason is does not is that not enough people trust it...and why would they with swinging value like it does? @yRaz isn't wrong but neither are you, you're both right in different ways
I argue that the dollar is a terrible store of value. Inflation is greater than the interest on my savings account. In 2023, inflation outpaced the payout on my dividends. I come off as being pro-crypto but I'm mostly trying to point out how terrible fiat currency is. I'm also annoyed at people not understanding what a ponzi or pyramid scheme is.
 
I argue that the dollar is a terrible store of value. Inflation is greater than the interest on my savings account. In 2023, inflation outpaced the payout on my dividends. I come off as being pro-crypto but I'm mostly trying to point out how terrible fiat currency is. I'm also annoyed at people not understanding what a ponzi or pyramid scheme is.
Most bitcoin believers are holding bitcoin to hold bitcoin, not to make money or turn it back into USD. USD is just debt...


This is the amount that needs to be paid back. USD will be worthless if they can't get a grip on it.
 
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