Plus 9% annual interest on their claims.

For the first time in bankruptcy history, victims will receive more than 100% of their funds back courtesy of one man: John Ray.

But While investors suffered for 2 years, someone else got rich off their pain.

And it wasn't Sam Bankman-Fried...

This is the story of how one man cleaned up an $8 billion mess and how others quietly turned that recovery into their own jackpot.

Meet John Ray III The cleanup man for corporate disasters.

The same man who sorted out Enron’s $63 billion collapse.

When FTX collapsed in November 2022, it was chaos:

- $8 billion in customer funds missing

- Only $900 million in liquid assets against $9 billion owed

- The founder, Sam Bankman-Fried, was accused of one of the largest frauds in history

Most assumed the money was gone forever.

Not untill John Ray showed up

A Lawyer and corporate restructuring expert

The kind of man you call when everything is in ruins.

Ray inherited a wreckage.

FTX, once the 3rd largest crypto exchange with over a million users and celebrity

endorsements, had been poked from the inside.

Sam Bankman-Fried had funneled customer funds to his hedge fund, Alameda Research, using them for:

- Risky crypto trades

- Political donations

- Luxury Bahamas real estate

- Personal loans to executives

The company’s books were a made of 130+ shell companies, offshore accounts, and opaque crypto holdings.

Then he got exposed:

CoinDesk revealed Alameda's balance sheet was propped up by FTX's own token.

Rival exchange Binance announced they'd sell their FTX tokens.

Panic selling began immediately.

Customers rushed to withdraw their money.

Then it all came crashing down:

November 2022: FTX collapsed overnight.

FTX had only $900 million in liquid assets against $9 billion in liabilities.

The $8 billion customer funds were gone.

Sam Bankman-Fried resigned in disgrace.

Now there was a question:

How can all the lost money be recovered?

But Ray had done this before, and he knew

His first discovery was shocking: FTX had only 0.1% of customer Bitcoin and 1.2% of Ethereum.

But buried in the chaos, he found something extraordinary:

FTX wasn't just a crypto exchange.

It was a massive investment fund in disguise.

Bankman-Fried had secretly used customer money to buy stakes in:

- AI startup Anthropic

- 55.8 million Solana tokens

- Dozens of venture capital investments

How did they turn out?

In 2021, Bankman-Fried invested $500 million in the AI startup.

By 2024, that stake was worth $1.4 billion.

The bankruptcy team sold the stake for $884 million to Abu Dhabi's sovereign wealth fund.

One investment recovered nearly a billion dollars alone.

Secondly, FTX held 55.8 million SOL tokens.

And the Solana surge?

When the exchange collapsed, SOL was trading at $20.

By 2024, it hit $40 per token.

That single crypto holding added over $1 billion to the recovery fund.

The legal team became financial detectives.

They traced money through:

- 130+ shell companies

- Offshore accounts in the Bahamas

- Luxury real estate purchases

- Political donations

- Personal investments

Every dollar was hunted down and clawed back.

The math was stunning:

- FTX owed customers: $11.2B

- Total recovered: $16.5B

- Surplus: $5.3B

In October 2024, Judge John Dorsey approved the payout plan:

98% of customers with claims under $50k will get 119% back within 60 days

Plus interest on their claims

But here’s the twist:

While victims celebrated, hedge funds made even more.

During the collapse, distressed asset buyers scooped up claims from desperate victims for 10–20 cents on the dollar.

When Ray’s recovery hit, those claims skyrocketed in value.

Example:

- Buy a $100,000 claim for $20,000

- Payout is $119,000

- Profit: $99,000 a 495% return in under two years

Some of these funds never lost a dime in FTX they just bet on John Ray.

In the end, John Ray didn’t just recover FTX’s money.

He rewrote the playbook for complex bankruptcies, proving that even in the messiest corporate crimes, it’s possible to make victims whole.

But he also proved something else:

In finance, recovery is never just about justice.

It’s also about who’s smart, or ruthless enough to profit from the wreckage.

#FTX

#TechStories

#JohnRay

Inside Trackers

By

Ifeanyi Christopher