How FTX Found Billions to Repay Customers

The Journal.

The Wall Street Journal

Daily News, Business News, News

4.2 • 5.3K Ratings

🗓️ 13 May 2024

⏱️ 17 minutes

🔗️ Recording | iTunes | RSS

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Summary

When FTX collapsed into bankruptcy in 2022, many customers never thought they'd see their money again. But FTX's assets have rebounded. WSJ’s Andrew Scurria unpacks why FTX will have more than enough money to fully repay customers and many creditors. Further Reading: - Crypto Exchange FTX Is the Rare Financial Blowup That Will Repay Victims in Full Further Listening: - The Trial of Crypto’s Golden Boy Learn more about your ad choices. Visit megaphone.fm/adchoices

Transcript

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0:00.0	It took just over a week in November 2022 for FTX to go from one of the biggest
0:11.1	cryptocurrency exchanges in the world to declaring bankruptcy.
0:15.0	So FTX was experiencing a run on its bank.
0:20.0	People were furiously pulling money out in November 2022 because it was reported in the
0:24.4	press that the exchange didn't have enough money to cover its deposits and was in
0:29.3	financial straits. That's our colleague Andrew Scuria.
0:33.0	FTX declared bankruptcy because it owed more money than it actually had.
0:38.0	At the time, the company was thought to have an $8 billion shortfall.
0:42.0	And most FTX customers and investors an $8 billion shortfall.
0:42.7	And most FTX customers and investors
0:45.3	thought they'd never see their money again.
0:47.5	I woke up and lost $5 million.
0:49.4	I am very skeptical that people will be made 100% whole
0:52.3	at the day. So whole at the end of the day.
0:53.0	So I guess the chance of having my money balance is nearly zero.
0:57.0	When FTX went bankrupt, Andrew and some colleagues debated how many cents on the dollar
1:02.0	FTX customers might get back.
1:04.0	One colleague guessed five cents.
1:06.0	Another one said 10.
1:08.0	I said 30.
1:10.0	And the answer is 100.
1:12.0	100 cents on the dollar. And the answer is 100.
	...

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