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- The FTX exchange received approval from the US bankruptcy judge for its reorganization plan.
- The exchange plans to initially pay back 98% creditors within the first 60 days of the plan.
The Web3 community after a recent slump has begun to stir up its activity. Meanwhile, the looming US elections and FED reports have influenced the sector’s different aspects. While prices have shown mixed signals, the industry itself has become vibrant. A recent report stated that almost 7.51% of the global population is now involved in cryptocurrency.
On the other hand, emerging from the past, bankrupt firm FTX received approval from the US bankruptcy judge in the District of Delaware for its reorganization plan. Judge John Dorsey has given the green signal for FTX exchange to go ahead with its reorganization plan as stated by the firm’s official announcement.
The reorganization plan unfolds thus – the debtors will be able to pay back 98% of the creditors with approximately 119% of their accounts’ acclaimed value. This amount will be deposited to them within a period of 60 days from the date the plan is called to effect.
The CEO & CRO of FTX, John J. Ray III stated in the official statement:
“The Court’s confirmation of our Plan is a significant milestone on our pathway to distributing cash to customers and creditors.”
Additionally, the exchange stated that the distribution amount would be between $14.7 billion and $16.5 billion. The CEO also said that the firm plans to pay back 100% of bankruptcy claim amounts along with interest for non-governmental organizations.
What is all the Stir about the FTX Repayment?
FTX announced bankruptcy in November 2022, after its former CEO Sam-Bankman Fried was convicted of fraudulent activities and misappropriation of user funds. SBF’s actions cost FTX the loss of $700 million in user funds which the firm has since tried to recover.
Additionally, the exchange, as stated by current CEO Ray, has been working to retrieve the funds and pay back creditors. The firm in the last few months began navigating through regulatory compliances and jurisdictions before the approval.
Notably, the firm had received creditors’ support before the recent court hearing. Moreover, the FTX repayment is one of the largest bankruptcy asset distributions in history. Another crypto exchange Mt.Gox also made repayments to users this year, after nearly a decade.
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