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Cryptocurrency News Articles
Court Approves FTX Settlements, Paving the Way for Customers to Repay Using $16B in Recovered Assets
Oct 08, 2024 at 04:33 am
The approved plan includes a series of settlements with FTX customers, creditors, US government agencies, and liquidators tasked with managing
A US bankruptcy court has officially approved crypto exchange FTX's liquidation plan, paving the way for it to begin repaying customers using $16 billion in recovered assets, according to a report by Reuters on Monday, April 24.
The ruling was made by Judge John Dorsey during a court hearing in Wilmington, Delaware. The approved plan includes a series of settlements with FTX customers, creditors, US government agencies, and liquidators tasked with managing the company’s operations outside the United States.
These settlements prioritize the repayment of customers before addressing claims from government regulators, allowing FTX to utilize its assets effectively in the repayment process.
As part of the approved plan, FTX customers will receive at least 118% of the value of their accounts as of November 2022, the month the failed crypto exchange filed for bankruptcy.
FTX has characterized this outcome as a triumph for its creditors, attributing it to the successful recovery of cash and crypto assets that had initially gone missing amid the chaos surrounding the company’s collapse, according to Reuters.
Moreover, FTX has raised further funds by liquidating other assets, including its investments in various technology firms, such as the artificial intelligence (AI) startup Anthropic.
However, customer reactions to the repayment plan have been mixed. Many former users of the exchange have expressed disappointment, feeling that the collapse of FTX prevented them from capitalizing on a significant rebound in cryptocurrency prices since the market hit its lowest point in 2022.
Some customers have voiced objections to the plan, arguing for higher repayments that reflect the recent increases in crypto values. FTX has maintained that it cannot simply return the cryptocurrency assets originally deposited by customers, as those assets were misappropriated by founder Sam Bankman-Fried.
Bankman-Fried, who was sentenced to 25 years in prison in March for defrauding FTX customers, has since appealed his conviction, further complicating the aftermath of the exchange’s failure.
At the time of writing, the exchange’s native token, FTT, has surged by 20% to the $3 mark for the first time in nearly 8 months amid the first quarter of the year’s uptrend.
CoinGecko data also shows that FTT has seen a notable 176% increase in trading volume in the last few hours, but is still down nearly 97% from its all-time high of $84, reached in September 2021.
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