FTX Judge Approves Plan to Distribute $12B - What’s Next for FTX Customers?
The reorganization plan to repay 98% of FTX customers with 119% of their account value has been approved in court.
Almost two years after the devastating collapse of Sam Bankman-Fried’s crypto exchange, FTX customers are finally seeing light at the end of the tunnel.
On October 7, 2024, the United States Bankruptcy Court for the District of Delaware confirmed FTX’s reorganization plan. The plan promises to make whole 98% of FTX customers, with each recipient expected to receive approximately 119% of their account value.
However, not everyone is thrilled with the long-awaited announcement.
Crypto Bull Market Bolsters FTX Liquidation Plan
Courtesy of improving market dynamics and surging prices, the team leading FTX’s asset recovery program has found itself with a surplus of funds. Over the last two years, FTX has worked tirelessly to recover the customer assets defrauded during the 2022 scandal.
The FTX restructuring effort estimates that the total value of collected property available for distribution sits between $14.7 billion and $16.5 billion. After completing the necessary KYC (Know-Your-Customer) procedures, FTX creditors will be able to claim their returned funds within 60 days of the restructuring plan’s execution.
John J. Ray III, FTX CEO and Chief Restructuring Officer, commended the efforts of all parties involved in the recovery process, highlighting the plan’s approval as a key step towards making FTX customers whole.
"The Court's confirmation of our Plan is a significant milestone on our pathway to distributing cash to customers and creditors. Today's achievement is only possible because of the experience and tireless work of the team of professionals supporting this case, who have recovered billions of dollars by rebuilding FTX's books from the ground up and from there marshaling assets from around the globe. It also reflects the strong collaboration we have had with governments and agencies from around the world that share our goal of mitigating the wrongdoings of the FTX insiders." - John J. Ray III, CEO and Chief Restructuring Officer at FTX.
While no timeline has been set for the rollout of the restructuring plan, Ray II assures creditors that FTX is dedicated to “getting recoveries to customers around the world as safely and expeditiously as possible.”
Despite the liquidation plan returning lost funds to 98% of FTX customers, not everyone is thrilled with the outcome.
Some Creditors Disappointed with Plan
While having the full value of their FTX accounts returned to them would’ve initially been considered a great result, some commentators on social media are discontent with cash repayments.
Representing one of the largest FTX creditor groups, Sunil Kavira criticized the plan for repaying customers in USD, rather than in their lost crypto holdings. The representative argues that creditors are getting a raw deal, receiving far less in cash than they would have received had they been repaid in crypto assets.
According to social media commentators, FTX creditors will ultimately receive 80% less than their original holdings, with excess funds being paid out to select FTX shareholders.
What’s Next for FTX Customers?
FTX creditors who thought they might never see their lost funds again can finally breathe a sigh of relief. While they won’t be able to realize the price appreciation of lost assets, FTX’s recovery efforts have ensured that creditors won’t be out of pocket in USD terms.
Considering that the FTX scandal was, in Judge Kaplan’s words, the “greatest financial fraud ever perpetrated in this country”, the fact that 98% of customers will be made whole is a remarkable achievement.
While FTX creditors are surely eager to have their funds returned, the date of the plan’s execution is yet to be announced. Claims are expected to be available within 60 days of the plan’s execution, meaning FTX customers may not see their funds before the end of 2024.
Read More on SolanaFloor
Step Finance announces plan to burn $8M worth of $STEP tokens
Do Buyback-and-Burn Mechanics Offer Sustainable Token Growth?
‘Not Your Keys, Not Your Crypto’ - Learn Why: