Had Money in FTX? Is It Possible to Get Your Money Back?

Written by nwujm

For FTX customers, the past few weeks have been awful. Customers were rendered helpless and unable to withdraw their funds as many watched in horror as the platform they had placed their faith in rapidly collapsed. The bad news is that you may not be able to get your assets back if, like me, you had them on the exchange. The process could take years, even if you can get some of your money back.

The most important questions for customers of FTX and FTX.US who want to know if they might get their money back are:

How much capital does FTX possess? The company’s balance sheet shows a significant gap, and it is unclear what assets it still owns or how much the restructuring efforts might be able to recover. It will have less money available to pay its creditors the less cash it has.

In the event of bankruptcy, how will FTX customers be treated? There are a lot of people FTX owes money to, and bankruptcies typically have a hierarchy. We do not yet know where customers will stand in the queue, and whether certain types of creditors will be prioritized over others.

In a court filing late last week, John J. Ray, the new CEO who has taken over during the bankruptcy proceedings, outlined some of the issues. On November 11, Ray took over as CEO and founder of Enron and oversaw the company’s liquidation. His preliminary findings provide a glimpse of the difficulties that customers will face in recouping their funds.

How much capital does FTX possess?

We don’t know the answer to this, even though it sounds impossible. We don’t even have a rough estimate because the financial statements and records for the FTX are in such disarray. According to Beam’s underlying court statement, “Never in my vocation have I seen such a total disappointment of corporate controls and such a total shortfall of dependable monetary data as happened here.”

Ray states that a “substantial portion” of the company’s assets “may be missing or stolen,” which is crucial information for customers. To further summarize Ray’s initial findings:

The balance sheets do not include customer deposits.
Who exactly worked for FTX and what they did are unknown.
On the day it filed for bankruptcy, the exchange lost more than $370 million.
With little documentation, corporate funds were used to purchase homes and other items for some FTX employees.
Portions of the FTX bunch never held executive gatherings, and it doesn’t have a rundown of financial balances and signatories.

Ray’s team will employ forensic investigators and cyber security specialists to locate assets that were illegally moved and attempt to recover them in addition to determining what funds the FTX companies hold. The more money that can be returned to FTX’s creditors, the more they can recover.

In the event of bankruptcy, how will FTX customers be treated?
Many investors in cryptocurrencies are aware that these are volatile assets that can fall significantly quickly. However, volatility is only one of the risks. There aren’t many safeguards in place when crypto exchanges fail, which is something that can happen and does.

FDIC insurance protects money held in a traditional bank for up to $250,000 per account; however, many cryptocurrency platforms lack these safeguards. In the event of a platform failure, your digital assets could become entangled in bankruptcy proceedings if you leave them on an exchange and do not move them to an external crypto wallet. It’s hard to tell exactly what will happen because these are relatively uncharted waters.

Several FTX customers have a glimmer of hope: According to FTX’s terms and conditions, you remain the owner of any digital assets in your account, not FTX. Customers of other crypto platforms that filed for bankruptcy earlier this year were treated as unsecured creditors because they had not fulfilled these commitments. Generally, got lenders – – a leaser whose advance is upheld by insurance of some sort or another – – get need over unstable banks.

Some of FTX’s customers may be in a better position because of the way the terms and conditions are written. FTX does not own those assets on paper. Consequently, there is a possibility that the assets of FTX customers will not become entangled in bankruptcy proceedings. Fortune says that customers may be able to get their money back before it goes to unsecured or secured creditors.

Be ready for a lot of legal wrangling and ifs and buts. To begin, other creditors may attempt to persuade the bankruptcy court that FTX owned all of the money, including customer funds. Additionally, if your funds were part of FTX’s yield-generating programs, you may still be treated as an unsecured creditor, as one digital assets lawyer told Coindesk.

Given that the FTX user agreement stated otherwise, it doesn’t seem fair that the money or cryptocurrency you held on FTX could be used to pay other creditors. Sadly, a business that appears to have been managing billions of dollars of people’s money with little oversight and control is not always fair.

How FTX clients might get their cash back

There are a few stages you can take to recuperate your assets. The main thing is to look for legitimate exhortation, especially on the off chance that you have lost enormous amounts of cash. You should not rely on the user agreement to shield you from bankruptcy proceedings.

Focus on what’s going on in the Delaware Chapter 11 court and search for an open door to record your case. I am not a lawyer, so each case will be unique. However, you might be able to file a joint claim with other FTX customers. The situation is rapidly developing, so keep an eye on social media and news reports.

Download as much information as you can about your holdings and transactions. While FTX has experienced outages and is operating extremely slowly, the websites for FTX and FTX.US are currently operational. On the off chance that you can’t sign at the present moment, continue. You might be required to provide evidence of the assets you held on the exchange at some point. You are required to declare your crypto transactions, including any money you lost as a result of the FTX scandal, on your tax return in many nations.

If you had a lot of money on FTX, the thought that your money could disappear could be very hurtful. Although it is only a token of my sympathy, you are not alone. And keeping in mind that there are no simple responses, attempt to search for help from family, companions, or the web-based local area as you find a way through what is a very tough spot.

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