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A US bankruptcy court has granted FTX approval to solicit votes on a liquidation plan that pays customer claims in cash, Reuters reported on June 25.
The cash payment plan would pay customers based on crypto prices at the time of FTX’s November 2022 collapse, overriding objections from customers who seek higher amounts because crypto prices have risen.
In an objection, some creditors said FTX is “breathlessly touting… a full recovery with interest” and said customers should be informed that the supposed full recovery is “nothing of the sort.”
Reuters estimated that customers who held one Bitcoin with FTX in 2022 would receive $16,800 under the plan instead of the current value of each BTC.
Creditors raised their concerns over the difference as early as May.
FTX will accept votes until Aug. 16 and seek final approval for the plan on Oct. 7.
Impossible to return original amount
FTX CEO John J. Ray III said it is impossible to return the crypto customers had deposited due to the company’s shortfall upon its bankruptcy filing.
Ray said in a statement:
“We cannot give tokens back that we never had.”
Upon its bankruptcy in November 2022, FTX held only 0.1% of the Bitcoin (BTC) and 1.2% of Ethereum (ETH) shown in customer balances.
Ray said the case cannot increase amounts owed to certain creditors and said anyone demanding appreciated value would be “taking money away from fellow customers.”
Past developments indicate that 98% of customers will gain access to the total amount owed within 60 days of the bankruptcy court approving FTX’s wind-down plans. A faster payment option will cover customer claims under $50,000.
Separate reports from Bloomberg indicate that FTX has $11.4 billion in assets. By the end of October, the company could potentially increase its assets to $12.6 billion.