Gairika Mitra
The latest FTX bankruptcy filing reveals a court hearing scheduled for Oct. 7, 2024 to confirm the company’s reorganization plan. This potentially paves the way for creditors to begin receiving compensation.
Analytics firm Wu Blockchain reported the move on Monday.
Creditors with claims of less than $50,000 may start to see compensation by the end of 2024, according to the filing. However, parties with larger claims might not receive their share until the first or second quarter of 2025, highlighting the complex and lengthy process of unwinding the bankruptcy.
FTX Bankruptcy: A Cautionary Tale of Mismanagement and Deception
FTX, once a prominent cryptocurrency exchange, filed for bankruptcy in November 2022 amid allegations of embezzlement and misuse of customer funds by its owners. The downfall of FTX was triggered by a surge in customer withdrawals, which uncovered an $8 billion deficit in the exchange’s accounts. Before its collapse, FTX ranked as the third-largest cryptocurrency exchange by trading volume, boasting a user base of over one million.
The collapse began with a report from CoinDesk which revealed that the majority of assets held by Alameda Research — a quantitative trading firm and sister company run by Sam Bankman-Fried — were composed of FTT and other tokens created and controlled by FTX, rather than fiat currencies or established cryptocurrencies with reliable market value.
As confidence plummeted, numerous investors and customers withdrew their funds, leading FTX to declare insolvency. This crisis raised alarms within the cryptocurrency sector regarding FTX’s excessive leverage with Alameda Research, questionable financial practices, and the associated risks of its financial management.
Ellison’s Plea for Leniency and Salame’s Blame-Shifting
In the latest development, The Shib Daily reported that to avoid prison time for her role in the dramatic FTX bankruptcy, Caroline Ellison, former CEO of Alameda Research, is requesting leniency from a federal judge. She is framing herself as a victim of manipulation by FTX founder Bankman-Fried and citing her own psychological vulnerabilities.
In a late-night court filing, Ellison’s legal team argued that her significant cooperation with authorities and the detrimental influence of Bankman-Fried justified a sentence of time served and supervised release instead of incarceration.
Furthermore, as Caroline Ellison awaited sentencing for her involvement in the FTX collapse, Ryan Salame, former co-CEO of FTX Digital Markets, took to X not to express sympathy, but to shift blame and defend his former boss, Sam Bankman-Fried (SBF).
In a series of tweets, Salame asserted that it was Ellison, not SBF, who had instructed him to make political contributions.
Read More
- Ex-FTX Co-CEO Turns on Caroline Ellison, Defending Former Boss
- Ex FTX Co-CEO Throws Silvergate Under The Bus, Alleges Role In Crypto Empire’s Collapse
- Caroline Ellison Seeks Leniency, Casts Herself as Victim in FTX Saga
Gairika holds positions in BTC. This article is provided for informational purposes only and should not be construed as financial advice. The Shib Magazine and The Shib Daily are the official media and publications of the Shiba Inu cryptocurrency project. Readers are encouraged to conduct their own research and consult with a qualified financial adviser before making any investment decisions.
