FTXA reorganization plan filed with the court on Tuesday promises to pay account holders 100% of their official demands.
Founder in November 2022 Sam Bankman-FriedThe stock market, which collapsed after a scandal involving , managed to collect a whopping $15 billion to repay creditors. This amount, obtained primarily from the sale of venture capital investments, significantly exceeds the projected recovery amounts.
Under the proposed plan, 98% of creditors with total claims of $50,000 or less would receive payments. John Ray III, who assumed leadership after the bankruptcy, expressed his satisfaction with the proposal and underlined his intention to return the full amounts plus interest owed to non-government creditors.
The collapse of FTX, once one of the leading players in the cryptocurrency world, shocked the industry. This incident led to Bankman-Fried being convicted on fraud charges and sentenced to 25 years in prison. The new CEO did not mince words when describing the situation he inherited, calling it a “dumpster fire” and a “crime scene” and claiming customer funds were being misused for personal use and trading.
Despite hopes pinned on a crypto market rally, recovery efforts have been hampered by the disappearance of approximately 99% of cryptocurrencies held by the exchange during the bankruptcy. As a result, the majority of the redemption pool results from the liquidation of FTX’s investment portfolio. In particular, the sale of its stake in artificial intelligence startup Anthropic this year for approximately $900 million has significantly boosted existing funds.
The restructuring plan received unanimous support from FTX’s major creditor groups and includes a $200 million cash settlement for a $24 billion claim filed by the Internal Revenue Service. Pending court approval, plaintiffs will vote on the terms before final approval at a subsequent hearing. Notably, the proposed recoveries are based on cryptocurrency prices during a period of significant market downturn, at the time of filing for bankruptcy.
