coininsider.com
FTX and FTX.US customers might be on the verge of recovering a significant part of their assets from the massive attack in 2022. A proposed settlement reached between FTX creditors and debtors offers hope that more than 90% of assets could be returned to customers by the middle of 2024.
FTX debtors announced the breakthrough in their Chapter 11 case in a tweet, noting that after extensive discussions with unsecured creditors, a committee of customers based outside of the US and class action plaintiffs, they had led to another major milestone in the case.
(1/4) The FTX Debtors have announced another major milestone in their chapter 11 cases.
— FTX (@FTX_Official) October 17, 2023
It’s worthwhile noting that the debtors still need to submit an official filing by December 16 to seek the court’s approval.
A central element of the strategy is referred to as the “shortfall claim.” FTX debtors estimate that customers of both FTX.com and FTX.US combined could potentially receive 90% of the available assets. This claim amounts to around $8.9 billion for FTX.com and $166 million for FTX.US. If the bankruptcy court approves this plan, the funds are expected to be distributed to customers by the end of the second quarter of 2024.
John J. Ray III, CEO and chief restructuring officer of FTX commented:
“Together, starting in the most challenging financial disaster I have seen, the debtors and their creditors have created enormous value from a situation that easily could have been a near-total loss for customers.”
Under the amended plan, FTX has organised the assets into three pools: Assets designated for the benefit of FTX.com customers, assets for U.S. customers, and a general pool of other assets. Only the first two groups are part of the shortfall claim. Customers of both exchanges may not receive full compensation, with FTX.com customers possibly facing a higher percentage of losses.
As for a particular provision in the proposed plan, customers who withdrew over $250,000 from the exchange within nine days of the bankruptcy will have their claims reduced by 15% of the withdrawn amount. This means that if you withdrew less than $250,000 during that period, your claim will remain unaffected. And FTX debtors explained:
“Eligible customers that have a preference settlement amount of less than $250,000 during the nine-day period would be able to accept the settlement without any reduction of claim or payment.”