Supreme Court Ruling Bolsters Australian FTX Creditors’ Prospects for Full Recovery
The prospects of Australian creditors of the crypto exchange FTX getting all their money back recently received a boost after a judge ruled that only those who initiated Australian dollar withdrawal requests are entitled to a share of the $26 million recovered. Australian investors with crypto-to-crypto withdrawal requests will have to wait for the completion of bankruptcy proceedings in the U.S.
Australian Dollar Withdrawal Requests
A recent ruling by the Victorian Supreme Court in January has increased the likelihood of Australian creditors of the crypto exchange FTX getting all their money back, a report has said. In his ruling, Judge Patricia Matthews clarified that only those who initiated Australian dollar withdrawal requests — about 747 investors — qualify for full reimbursement.
According to a report in the Australian Financial Review, the $26 million collected by the advisory and investment firm Korda Mentha is sufficient to pay back all the 747 investors. The suggestion that Australian investors are set to be made whole follows reports that FTX has prioritized repaying creditors over reviving the platform.
Meanwhile, the Supreme Court judge ruled however that Australian investors with crypto-to-crypto withdrawal requests will have to wait for the completion of bankruptcy proceedings in the U.S. FTX lawyer Andrew Dietderich said he is optimistic that all creditors will be made whole.
“There is still a great amount of work, and risk, between us and that result. But we believe the objective is within reach, and we have a strategy to achieve it,” Dietderich reportedly told a U.S. judge.
In another development, the FTX creditor committee lawyer, Kris Hansen, reportedly emphasized that all reimbursements will be calculated based on prices prevailing at the time of the bankruptcy filing. This stance means that the remarkable surge in the value of cryptocurrencies such as bitcoin (BTC) and Solana (SOL) — which has soared by more than 600% since November 2022 — will not directly translate into higher payouts for creditors.
While this decision has frustrated some creditors, a U.S. judge has ruled that FTX’s reimbursement proposal adheres to legal standards and is above board.
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