|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cryptocurrency News Articles
FTX Bankruptcy Plan Approved, Exchange Aims to Reimburse 98% of Customers Within 60 Days
Oct 09, 2024 at 06:15 am
The plan paves the way for the company to repay billions of dollars to its customers, utilizing up to $16.5 billion in recovered assets.
A U.S. bankruptcy judge on Wednesday approved a plan for crypto exchange FTX to repay billions of dollars to its customers, a move hailed by the company as a “historic achievement” in navigating the complexities of Chapter 11 bankruptcy.
The plan, which hinges on a series of settlements with FTX customers, creditors, and U.S. government agencies, was approved by Judge John Dorsey of Delaware at a hearing in Wilmington.
Dorsey praised FTX’s successful restructuring efforts, calling it a “model case” for navigating the complexities of a Chapter 11 bankruptcy.
“The magnitude of what has been accomplished here cannot be overstated,” Dorsey said. “This is a Chapter 11 case of almost unprecedented size and complexity.”
FTX filed for bankruptcy in November 2022 after a liquidity crisis triggered by revelations that founder Sam Bankman-Fried had misused customer funds to cover risky bets by his hedge fund, Alameda Research.
The company estimates that it will have between $14.7 billion and $16.5 billion available to repay creditors, ensuring that customers receive at least 118% of their account value as of November 2022.
FTX aims to reimburse 98% of its customer base – those with account balances of $50,000 or less – within 60 days of the plan’s effective date, which is yet to be finalized.
These settlements prioritize the repayment of FTX exchange customers, giving them precedence over potential claims from government regulators.
The plan has been met with mixed reactions from customers. While many acknowledge the significant progress in recovering funds, some express disappointment over missing out on the substantial rebound in crypto prices since the market’s low point in 2022.
A number of customers have voiced their objections, demanding higher repayments that reflect the current market value of cryptocurrencies.
David Adler, representing four objecting creditors, pointed out that Bitcoin’s price, for example, has surged to over $63,000 from its November 2022 value of $16,000. Customers who deposited Bitcoin on FTX find it difficult to accept receiving a 100% recovery based on the significantly lower prices from two years ago, Adler argued.
FTX countered these objections by explaining that simply returning the original crypto assets is not feasible as they were misappropriated by Bankman-Fried.
At the time of its bankruptcy filing, FTX.com held a mere 0.1% of the Bitcoin that customers believed they had deposited, highlighting the extent of the misappropriation.
Steve Coverick, one of FTX’s financial advisors, testified that it would be “exorbitantly expensive” to purchase billions of dollars worth of crypto assets on the open market to repay customers in the same cryptocurrencies they held before the bankruptcy.
The court’s approval of the bankruptcy plan nevertheless represents a significant step forward in resolving the FTX saga and providing a measure of relief to its customers.
The company continues to work out logistical details to ensure accurate and fair repayments across over 200 jurisdictions worldwide.
“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,” FTX CEO John Ray said in a statement.
“We are grateful for the court’s approval of the plan, which will enable us to begin making substantial distributions to creditors as soon as practicable.”
Disclaimer:info@kdj.com
The information provided is not trading advice. kdj.com does not assume any responsibility for any investments made based on the information provided in this article. Cryptocurrencies are highly volatile and it is highly recommended that you invest with caution after thorough research!
If you believe that the content used on this website infringes your copyright, please contact us immediately (info@kdj.com) and we will delete it promptly.
-
- Money Electric: The Bitcoin Mystery Review – Who Is Satoshi Nakamoto?
- Oct 09, 2024 at 10:15 am
- The search for Satoshi has now gone on for more than a decade. It has produced spectacular misfires, including Newsweek’s infamous 2014 cover story that claimed to find Satoshi hiding in plain sight in Los Angeles.
-
- Bitcoin Stalls Near $65,000 as Selling Pressure Emerges; Solana Flashes Broadening Wedge Reversal Pattern; Dogecoin Misses Its Chance
- Oct 09, 2024 at 10:15 am
- Recently there was a significant surge in the price of Bitcoin bringing it very near to $65,000. Many participants on the market were taken aback by the sudden and swift action. But just as quickly as Bitcoin's value increased, selling pressure quickly followed, which caused a sharp decline in price.