Victims of the FTX meltdown are getting 100% of their money back — and then some

FTX founder Sam Bankman-Fried will be sentenced in a US court today, and it’s anyone’s guess how many years he’ll do in the pokey: A handful, as his lawyers have suggested, or up to five decades, as prosecutors are suggesting.

Why is it so hard to sort out? And why the gulf between defense and prosecution sentencing recommendations so wide?

Crypto has soared since FTX melted down — its appreciation against the greenback is masking the underlying losses. Prosecutors have called the meltdown of FTX “one of the biggest financial frauds in American history.” But his legal team told the judge that, in the end, everyone is being made whole through bankruptcy proceedings: “Each victim . . . will receive 100 cents on the USD, plus interest,” they say.

Customers may in fact get 40% than the initial value of their claims against FTX, the Financial Times said earlier this week, citing remarks by FTX’s bankruptcy administrators.

But, but, but… That math relies on the fact that clients who filed claims against FTX are getting their money back in USD. But their original assets were crypto, and BTC, for example, is up about 4.4x to nearly USD 70k between the time FTX’s meltdown and now. The value of the AI assets FTX held — including a nearly USD 1 bn stake in Anthropic that administrators recently sold — have also soared.

Want to read more? Head to our website for coverage in the Financial Times | Wall Street Journal | CoinDesk | CNBC.

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Also worth knowing about this morning:

• From the FT’s Lex: “Donald Trump taps superfans to make Spacs great again. TMTG looks like a rightwing meme stock combined with the classic pathologies of the blank cheque bubble.”
• There should be “no rush” to cut rates given recent US inflation data, a senior US Federal Reserve official said yesterday, though he didn’t rule out the possibility of rate hikes later this year. (Reuters)

THE MARKET THIS MORNING-

Asian shares are in the red this morning while US futures were largely unchanged overnight, leaving the Dow, Nasdaq Composite, and S&P 500 still on track to close the first quarter up 10% or more. European futures were up slightly in as we slid toward dispatch time this morning, suggesting major benchmarks will open in the green later today.

Remember: Today is the last day of trading in 1Q 2024 for most Western markets, which will close Friday and Monday for the Easter holiday weekend.

THE CLOSING BELL: TADAWUL-

The TASIrose 0.2% yesterday on turnover of SAR 7.4 bn. The index is up 5.4% YTD.

In the green: Modern Mills (+30%), SAIC (+9.9%) and Saudi Cable (+9.9%).

In the red: AlKhaleej Training (-9.9%), AlBaha (-6.7%) and First Mills (-5.1%).

THE CLOSING BELL: NOMU-

The NomuCrose 1.3% yesterday on turnover of SAR 150.3 mn. The index is up 10.1% YTD.

In the green: Group Five (+11.6%), Ghida Alsultan (+8.6%) and Rawasi (+6.1%).

In the red:Enma AlRawabi (-8.3%), Almujtama Medical (-6.6%) and Leen AlKhair (-3.3%)

CORPORATE ACTIONS-

#1- Tam Development’s BoD has recommended a dividend payout of SAR 4 mn at SAR 1.23 per share for 2023, it said in a disclosure to Tadawul.

#2- Taiba Investment’s BoD has recommended a dividend payout of SAR 169 mn at SAR 0.65 per share for 2023, it said in a disclosure to Tadawul.

#3- Astra Industrial Group’s BoD has recommended a dividend payout of SAR 200 mn at SAR 2.5 per share for 2023, it said in a disclosure to Tadawul.

#4- Alamar Foods’s BoD has recommended a dividend payout of SAR 10 mn at SAR 0.4 per share for 4Q 2023, it said in a disclosure to Tadawul. Eligible shareholders can cash out on Monday, 22 April.

#5- Naqi Water’s BoD has recommended a 5% cash dividend (SAR 0.5 per share) for 2H 2023, amounting to a total of SAR 10 mn, according to a Tadawul disclosure.