The once-prominent crypto platform, FTX, is getting ready to refund distribute up to $16 billion back to its clientele, a decision confirmed in a legal proceeding ratifying its reorganization strategy.
Payouts hinge on Bitcoin's value at FTX's bankruptcy filing, which was under $18,000. Though some might find this figure disappointing, it's a partial recovery.
In Wilmington, Delaware, Judge John Dorsey gave the go-ahead on the restructuring proposal. The reimbursements are anticipated to commence within 60 days post-approval, with customer claims taking precedence.
FTX Closer to Repayment
By the close of 2024, individuals who suffered losses in the FTX debacle will not only recover their funds but may also see some interest, two years after the fall. The plan details that 98% of creditors can expect roughly 119% of approved claims following the plan's initiation within the next two months.
Helming the firm's recovery efforts, John J. Ray III noted a recovery between $14.7 billion to $16.5 billion meant for customer reimbursements.
Several asset sources feed into the reclaimed funds, including those under FTX's control and others acquired by governmental bodies and liquidators overseas.
Endorsing the plan marks a turning point in FTX's bankruptcy narrative. Ray III suggests it stands as one of the largest and most intricate bankruptcy asset revolutions to date.
FTX’s chief executive indicated that the company is collaborating with specialized agents to ensure safe funds distribution to over 200 regions worldwide. Specifics about when this plan and its initial payouts will start remain unannounced but will be relayed by FTX soon.
“Our global initiative involves setting up for creditor distributions across more than 200 regions. In advance of this, we are securing specialized agents to facilitate safekeeping and quick recovery for customers worldwide,” he informed.
With judicial endorsement, FTX's bankruptcy chapter is nearing its closure. Once executed, the reorganization strategy will facilitate substantial payouts to those wronged by FTX's disappointing downfall.
Yet, this isn't a complete wrap on one of America's grand frauds, as legal proceedings against former executives are ongoing.
SBF Still in Prison
Sam Bankman-Fried, one of the founders and erstwhile head of FTX, has been handed a 25-year prison sentence for multiple fraud and conspiracy charges. Furthermore, he’s been ordered to surrender $11 billion. However, Bankman-Fried contests his conviction, citing prejudice by the trial judge.
Alameda Research's former CEO, Caroline Ellison, received a two-year sentence in conjunction with an $11 billion forfeiture last September. Her cooperation with authorities contributed to the notably reduced sentence compared to potential maximum penalties.
FTX Bahamas’ former chief, Ryan Salame, accepted a sentence of approximately seven and a half years for admissions of illicit political donations.
Nishad Singh and Gary Wang, both integral FTX figures, are slated for sentencing later this year. They have pled guilty to multiple charges and await sentences for their contributions to the FTX scandal.
FTT Skyrockets After Court Approval
Judge Dorsey remarked during court proceedings that FTT, the FTX token, holds 'no value.' Nonetheless, following FTX’s bankruptcy strategy's approval, FTT's price soared by more than 50% to roughly $3.23 before dropping under $3.
As per CoinGecko, FTT has climbed around 119% in the previous month leading up to the court session. This surge may be fueled by optimism surrounding the creditor repayment plan.
