According to Bloomberg on March 31, FTX will pay debts to major creditors for US$11.4 billion at the end of May, after small creditors had collected funds and the funds were derived from asset recovery.
In the cryptocurrency space, FTX's bankruptcy has always attracted much attention. Now, FTX creditors have finally ushered in key progress. According to Bloomberg on March 31, FTX will start using the $11.4 billion cash reserves collected by the company since its closure to repay its debts to its main creditors at the end of May. This news undoubtedly brought a glimmer of hope to many creditors.
Andrew Dietderich, the lawyer in charge of FTX Chapter 11 Bankruptcy, revealed to the judge who took over the case management that small creditors holding FTX defined as "convenience creditors" have taken the lead in receiving payments. The main creditor group will have to wait until May 30 before the first payment will be received. The determination of this payment plan marks an important step in debt repayment in FTX bankruptcy case.
FTX filed for Chapter 11 Bankruptcy Protection in November 2022. At that time, its founder Sam Bankman-Fried was exposed to misappropriating client funds to fill the losses of his hedge fund Alameda Research, a scandal that directly led to the collapse of FTX, leaving more than one million creditors in deep trouble, becoming one of the most notorious financial scandals in cryptocurrency history.
Since bankruptcy, FTX has achieved certain results in asset recovery. FTX hired CEO John J. Ray III, known for his successful overseeing Enron liquidation, led the team to successfully recover $14.7 billion to $16.5 billion in assets. These assets cover technology investment, real estate, and digital assets. It is worth mentioning that the sharp rise in Bitcoin prices has also caused the value of digital assets held by FTX to rise, providing strong support for this debt repayment.
The $11.4 billion cash reserves used to repay the main creditors were accumulated by FTX's various means of reclaiming assets after bankruptcy. Funding sources include selling Bahamas luxury real estate, disposing of venture capital portfolios, and even the "League of Legends" game skins collected by Sam Bankman-Fried were monetized. In addition, the sell-off of SOL tokens held by FTX also contributed US$3.2 billion.
However, not all creditors are satisfied with the repayment plan. Some creditors advocate repayment in the form of cryptocurrencies, after all, since 2022, the prices of cryptocurrencies such as Bitcoin have risen sharply. But U.S. bankruptcy judge John Dorsey ruled that all repayments must be made in cash and based on the valuation of the claim in 2022.
FTX's repayment action has also had a profound impact on the cryptocurrency industry. It not only restores the market's confidence in the cryptocurrency market to a certain extent, but also once again highlights the importance of crypto market supervision. With the advancement of the repayment plan of the main creditors, the FTX bankruptcy case has gradually entered the final stage, but the impact it has on the industry will continue to ferment in the future.
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.
