- FTX, a major cryptocurrency exchange, has filed an amended Plan of Reorganization and Disclosure Statement with the bankruptcy court, proposing a way to repay creditors between $14.5 billion and $16.3 billion.
- The firm has managed to recover these funds from selling assets and consolidating funds from various entities, promising to cover the losses of customers when the exchange collapsed in November 2022.
- This development is a significant relief for creditors who have been waiting for reimbursement.
FTX has proposed a plan to repay creditors between $14.5 billion and $16.3 billion, a significant recovery since the exchange’s collapse in November 2022. The firm has managed to recover these funds by selling assets and consolidating funds from various entities.
FTX’s Remarkable Recovery
FTX has achieved this recovery level by monetizing an extraordinarily diverse collection of assets, most of which were proprietary investments held by the Alameda or FTX Ventures businesses, or litigation claims. The FTX Debtors today filed their anticipated amended Plan of Reorganization and accompanying Disclosure Statement with the U.S. Bankruptcy Court.
Details of the Proposed Plan
Under the proposed plan, 98% of FTX creditors with claims under $50,000 would receive around 118% of their allowed claims in cash within 60 days after the plan is approved. Other non-governmental creditors would receive 100% of their allowed claims, plus potential additional interest payments of up to 9% from when FTX filed for bankruptcy. FTX Chief Executive Officer John Ray expressed his satisfaction with the plan, stating that it is an unbelievable result in any bankruptcy scenario. The firm has also reached settlements with the United States IRS (Internal Revenue Service) and the Commodity Futures Trading Commission (CFTC) to resolve huge claims.
Crypto Market Recovery Aids FTX
Much of the excess cash has been attributed to the recovery in cryptocurrency markets, particularly its heavy holdings such as Solana. SOL prices have surged more than 1,100% since November 2022, when they fell below $12 in the wake of the exchange meltdown. The asset is currently trading around $149, following a 4.5% decline on the day. SOL hit a 2024 high of $208 in mid-March but remains down 43% from its November 2021 peak price of $260.
Conclusion
FTX’s proposed plan to repay creditors and its recovery from the November 2022 collapse is a significant development in the crypto world. The firm’s ability to recover by selling assets and consolidating funds from various entities demonstrates the resilience of the crypto market. However, the payouts are still several months away as the firm finalizes its bankruptcy case.
