Originally published on: September 30, 2024
FTX creditors are in for a harsh reality as they will only receive 10–25% of their cryptocurrency holdings following the revision of bankruptcy documents. This news comes as a devastating blow to many FTX customers who have been struggling with mental distress, panic attacks, divorces, and even suicidal thoughts after losing their life savings in the collapse of the exchange.
Sunil Kavuri, a prominent FTX creditor and activist, shared with Cointelegraph the profound impact this revision will have on creditors. According to the new terms, creditors will be reimbursed based on the date of the petition, meaning they will only receive the value of their holdings at the time when Bitcoin was priced at around $16,000.
Meanwhile, in a surprising turn of events, Binance founder and former CEO Changpeng “CZ” Zhao has been released from a United States federal prison after serving a four-month sentence for Anti-Money Laundering (AML) violations. CZ pleaded guilty to federal charges related to AML controls at Binance and has now returned to freedom after spending time in both prison and a halfway house in Long Beach.
On another legal front, developer and Tornado Cash co-founder Roman Storm has been denied his motion to dismiss criminal charges brought against him by the US government. Despite his attempts to evade prosecution, Storm will face trial for charges including money laundering conspiracy and operating an unlicensed money-transmitting business.
Lastly, the Worldcoin Foundation and its affiliate Tool For Humanity (TFH) have been fined 1.1 billion Korean won (approximately $829,000) by South Korea’s Personal Information Protection Commission for violating the Personal Information Protection Act. This penalty comes after an investigation revealed that the organizations were collecting biometric information, such as iris scans, from South Koreans without a legal basis.
As the cryptocurrency and blockchain industry continues to navigate legal challenges and setbacks, it is crucial for stakeholders to stay informed and take necessary precautions to protect their assets and data.
