Lawyers said FTX withdrawals can take years or decades
The complications of digital assets, international bankruptcy, and conflicting authorities might add years to the schedule.
While investors are anxious to hear when they will be able to retrieve their assets from the now-closed cryptocurrency exchange FTX, bankruptcy attorneys warn that the process might take “decades.”
On November 11, the cryptocurrency exchange and 130 affiliates filed for Chapter 11 bankruptcy protection in the United States.
Insolvency attorney Stephen Earel, a partner at Co Cordis in Australia, said that “realizing” crypto assets and determining how to divide the monies would be an “enormous exercise” in the liquidation process, which may take years or even decades.
This is owing to the complexity of international bankruptcy concerns and conflicting jurisdictions, he said. Earel said that FTX customers are in line with everyone else, including creditors, investors, and venture capital funders, and he cautioned individuals who engaged in “crypto to crypto trading” that they may not get their funds for “years.”
Simon Dixon, the creator of the worldwide investing platform BnkToTheFuture and an active participant in the Celsius bankruptcy procedures, said that everybody who has funds on FTX would become creditors, and a creditors committee will be formed to represent their interests.
He indicated that the remaining assets would ultimately be made accessible to creditors, depending on what is left once bankruptcy expenses are deducted.
According to the CEO of Binance Australia, these expenses might be substantial due to the length of time necessary to recover the cash, resulting in increased legal and administrative fees that reduce client returns.
In the meanwhile, Digital Assets Lawyer Irina Heaver, partner at Keystone Law in UAE, informed Cointelegraph that Middle Eastern consumers are also suffering from the collapse of FTX, as the area has the third-largest FTX user base.