There have been many posts recently about the start of the FTX refunds and how bullish this is for crypto.
While this is undoubtedly true, many posts overlooked an essential aspect.
This is an aspect of why FTX clients are super upset. Let's discover 👇
First, FTX and SBF gambled away $12 billion of client funds through Alameda Research. The fallout? People lost savings, investments, and trust in the crypto industry. But now, it’s getting worse.
FTX is offering refunds — but there’s a catch. They’re paying out at bear market prices—back when BTC was at $16K, ETH at $1.2K, and SOL at $15. Fast-forward to today and BTC is over $62K. Yet, clients are getting refunded at the lowest prices in years. This is robbery — part two.
What does that mean?
Clients will get just 10-25% of their funds back, calculated on the bear market valuation — not current prices. Meanwhile, FTX shareholders walk away with a fat $230 million payout.
Why's That?
It’s because of the “dollarization of balance sheet” in bankruptcy proceedings. When a company fails, courts lock in the balance sheet in $ terms, determining payouts based on that locked-in value. Sadly, FTX’s balance sheet was “dollarized” at the absolute bottom of the bear market, leaving clients in the dust.
TL;DR: FTX clients are getting scammed, not once, but TWICE.
1️⃣ SBF gambled away their money. 2️⃣ Now, clients are being refunded at bear market prices.