FTXThe collapse of FTX last year left the crypto market in shambles. The jury has found the man behind the crash, Sam Bankman-Fried (SBF), guilty of all charges. With that verdict, other debt elements have kicked in with the hope that they could restore their losses.
Reports from Claims Market data have it that the current claim pricing of FTX has reached a high of 57%. The rise in FTX claim pricing can be ascribed to the valuation of artificial intelligence (AI) businesses in which the now-defunct crypto exchange had invested.
SBF’s road to prison
Throughout SBF’s court proceedings, his defense counsel painted him as a well-intentioned techie guru who made terrible mistakes. However, those claims did not hold out with the Jury. A few hours back, the jury found SBF guilty of all 7 counts of fraud related to FTX. As the old adage goes – the road to hell is paved with good intentions.
The FTX founder faces a maximum prison sentence of 115 years. Bankman-Fried, 31, is the son of two Stanford law professors and a graduate of the Massachusetts Institute of Technology. Earlier, he had pleaded not guilty to the allegations, which were all related to the collapse of FTX and sibling hedge fund Alameda late last year.
He was convicted, however, of wire fraud and conspiracy to commit wire fraud against FTX customers and Alameda Research lenders, conspiracy to commit securities fraud and conspiracy to commit commodities fraud against FTX investors, as well as conspiracy to commit money laundering.
Sam Bankman-Fried perpetrated one of the biggest financial frauds in American history. While the cryptocurrency industry might be new, and the players like Sam Bankman-Fried might be new, this kind of corruption is as old as time. This case has always been about lying, cheating, and stealing, and we have no patience for it.
Damian Williams, U.S. attorney for the Southern District of New York
The federal trial, which began in early October, pitted Bankman-Fried’s former close friends and top lieutenants against their former boss and ex-roommate’s sworn claims. After receiving the case at about 3:15 p.m. ET on Thursday and breaking for dinner around 6 p.m. ET, the jury returned a quick conclusion. The sentencing is scheduled for March 28 at 9:30 a.m. ET.
The case involving SBF has been likened to that of Elizabeth Holmes, the founder of the defunct medical device company Theranos in 2018.
Early in 2022, Holmes, 39, was found guilty on four counts of defrauding investors in Theranos subsequent to her self-defense testimony. She commenced her term of a little over eleven years in prison at a minimum-security facility in Bryan, Texas, in May, as per her sentence.
Will FTX customers get their investments back?
According to Claims Market data, the current claim pricing of FTX has reached a high of 57%. The rise in FTX claim pricing can be ascribed to the valuation of artificial intelligence (AI) businesses in which the now-defunct crypto exchange had invested.
When businesses face financial difficulties or insolvency, creditors stake their claims in an attempt to regain some of their investment. Investors frequently trade these claims based on predictions of the overall amount recovered. When the price of a claim grows, so does the expected recovery value.
The potential amount that could be recovered from FTX’s bankruptcy proceeding increased in tandem with the value of FTX’s investment in these AI businesses. A claim is a legal declaration of a monetary amount.
The claim percentage value is the percentage of the investment amount that the platform is expected to recover. When compared to other insolvent crypto enterprises, FTX claims value has moved to the top rank, with 35-40%, Genesis at around 50%, Alameda at 10%, and Three Arrows Capital at barely 7-9%.
Throughout the bankruptcy proceedings, the FTX claims have been a big topic of discussion among the crypto community. Previously, the judge in the case had approved FTX’s sale of approximately $3.4 billion in crypto assets in the market to compensate creditors.
With the rising value of cryptocurrencies and the increasing valuation of companies in which FTX invested, creditors stand a good possibility of recouping a major portion of their losses from FTX.
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