Dumb question: why are creditors getting paid more than they are owed?
> "We are poised to return 100% of bankruptcy claim amounts plus interest for non-governmental creditors."
For what it's worth, the article also points out that Bitcoin has gone up 260% since FTX's failure, so if FTX had not collapsed, somebody hodling their BTC there might have earned 260% instead of 19%.
That’s part of the whole issue - SBF was just doing whatever he felt like with customer assets and balances. Plus inventing assets out of thin air.
The profit that people will get has largely been driven by FTX’s investments in AI stuff, which turn out to have done great.
Think about it this way (exaggerated to make a point) - you give SBF $10k to buy Bitcoin on FTX. You expect him to have that amount of BTC locked away somewhere for you. Instead he blows your $10k on houses for himself, giving money to politicians, sponsoring sports grounds and buying stuff for his parents. He’s throws some of it into AI firms.
At the time of bankruptcy all he’s actually holding for you is $200 of BTC. That goes up in value to $460. W00t.
But wait, two years later those few million he threw at AI seemingly for shits and giggles are now worth a few billion, so you can be made whole and even get a little profit.
Instead, they are getting 119% of the USD value of a bitcoin in late 2022. They are massively losing out. They are effectively getting back 33% of their assets.
Dunno what the breakdown between bitcoin and cash creditors are, but the only way to make bitcoin creditors more whole would be to stiff the cash creditors.
And the FTX token creditors are making [DIVIDE BY ZERO]
Not an exact analogy but I think it at least shows there is a spectrum of situations to consider.
"Why aren't debt creditors getting made whole (as of date of bankruptcy) with the balance going to equity holders, like every other bankruptcy?"
My guess would be anything above what the customers get may well go out to government fines rather than returning to the equity holders.