Experts are claiming that it will take years or even may take decades to get funds back from the collapsed crypto platform FTX.
FTX was a second-ranked crypto exchange, in terms of 24 hours global crypto trade volume. Now this exchange has collapsed because of the low liquidity issues. With a small controversy with the Binance exchange over the FTX token sell, the users of the FTX exchange got into a panic and started to withdraw their funds. Later the exchange found that it is not able to give withdrawals to all of its users because the company already transferred a huge amount of user’s funds to its sister company Alameda Research. On 8 October, FTX & majority of its subsidiaries filed for bankruptcy in a US district court.
Just a few days ago, a few reports claimed that the FTX exchange may sell its Bitcoin (BTC) & Ethereum (ETH) holdings to pay its stakeholders, and further, that may impact the price of BTC & ETH. And such types of news created significant panic among the crypto traders, which can be seen through the sudden downfall in the price of two leading crypto assets.
Now the majority of the experts, close to the bankruptcy case of the FTX exchange & its sister companies, are claiming that it may take many years for the creditors to get funds that they deposited on the exchange.
Insolvency lawyer Stephen Earl, partner at Co Cordis in Australia explained that the FTX bankruptcy case will go through an “enormous exercise” in the liquidation process to “realize” the crypto assets and then work out how to distribute the funds, with price potentially taking years, if not “decades.”
Experts also noted that all the crypto traders, Investors & fund depositors in the ecosystem of the FTX exchange will fall under the category of Creditors. And more than 50 million creditors are in line from multiple countries, so the jurisdiction process will all take time.