The exchange, which filed for bankruptcy in November 2022, filed a reorganization plan to pay its 9 million customers. They lost $8.7 billion in cryptocurrencies.
With the end of the trial of Sam Bankman-Fried (SBF), the former head of FTX, the crypto exchange is in the news again. On Saturday, December 16, the liquidator of FTX submitted a proposal to pay off its creditors. As a reminder, FTX went bankrupt on November 11, 2022, causing a market disaster. Platform has more than 9 million lenders, individuals and companies. Sam Bankman-Fried was convicted in November 2023 on 7 counts, including misleading customers and investors.
That reorganization plan stipulates that “billions of dollars will be distributed in cash after liquidating a large portion of the company’s cryptocurrencies,” according to Bloomberg. As a reminder, FTX it has recovered $7.8 billion since filing for bankruptcy, compared to $8.7 billion claimed by its creditors. In September, the U.S. District Court in Delaware allowed FTX to sell its recovered cryptocurrency (around $3.4 billion) to pay its customers.
“Distribute Value”
The liquidator went on to say that the plan was designed to “effectively distribute value to all creditors”. As a reminder, at the time of the November 2022 FTX collapse, Bitcoin was trading around $20,000, up from over $40,000 today.
“The reorganization plan left important questions unanswered, including whether FTX will ever restart or how the company will estimate the value of certain tokens and the amount creditors can hope to recover,” Bloomberg points out, however.
The plan will be put to a vote by creditors next year before U.S. Bankruptcy Judge John Dorsey confirms it.