Bitget App
Trade smarter
Buy cryptoMarketsTradeFuturesEarnWeb3SquareMore
Trade
Spot
Buy and sell crypto with ease
Margin
Amplify your capital and maximize fund efficiency
Onchain
Going Onchain, without going Onchain!
Convert
Zero fees, no slippage
Explore
Launchhub
Gain the edge early and start winning
Copy
Copy elite trader with one click
Bots
Simple, fast, and reliable AI trading bot
Trade
USDT-M Futures
Futures settled in USDT
USDC-M Futures
Futures settled in USDC
Coin-M Futures
Futures settled in cryptocurrencies
Explore
Futures guide
A beginner-to-advanced journey in futures trading
Futures promotions
Generous rewards await
Overview
A variety of products to grow your assets
Simple Earn
Deposit and withdraw anytime to earn flexible returns with zero risk
On-chain Earn
Earn profits daily without risking principal
Structured Earn
Robust financial innovation to navigate market swings
VIP and Wealth Management
Premium services for smart wealth management
Loans
Flexible borrowing with high fund security
FTX Reorganization Plan Approved: Here’s When Creditors Will Be Paid

FTX Reorganization Plan Approved: Here’s When Creditors Will Be Paid

CCNCCN2024/10/08 17:36
By:CCN

Key Takeaways

  • The Delaware bankruptcy court has approved FTX’s reorganization plan.
  • 98% of creditors will receive at least 118% of their initial investment in cash, with interest.
  • FTX creditors can expect repayments to begin in December 2024.

The Delaware federal bankruptcy court has finally approved FTX’s reorganization plan , paving the way for the bankrupt exchange to parcel out a staggering $16 billion in repayments to creditors left reeling in the wake of its spectacular collapse.

Judge Approves FTX Reorganization Plan

98% of FTX creditors are set to receive a windfall of at least 118% of their initial investment in cash, courtesy of the bankrupt crypto exchange’s court-approved reorganization plan.

On Monday, Oct. 7, Judge John Dorsey of the United States Bankruptcy Court for the District of Delaware greenlit the plan, opting for cash payouts with accrued interest over in-kind reimbursements.

This means that users who lost their funds when FTX imploded will receive the equivalent value of their digital assets in cold, hard cash rather than their original crypto assets.

You May Also Like
  • Crypto Wazirx $235M Hack: Indian Regulators Probe WazirX Founders
  • Crypto SEC ‘Regrets Confusion’ Over Crypto Asset Security Definition, Amends Binance Complaint
  • XRP Ripple vs SEC Lawsuit Decision: SEC Fires Back With Appeal, Ripple Gears Up for Another Round

John J. Ray III, chief restructuring officer of FTX, called the approval of the reorganization plan a significant milestone.

“We are poised to return 100% of bankruptcy claim amounts plus interest for non-governmental creditors through what will be the largest and most complex bankruptcy estate asset distribution in history. The estate is working to finalize arrangements to make distributions to creditors across more than 200 jurisdictions worldwide.” Ray added .

The news comes as a long-awaited reprieve for thousands of creditors who lost their savings when FTX went bust in November 2022.

However, not everyone is celebrating the cash-only payouts, particularly given the significant surge in crypto prices over the past two years. Some had hoped to recoup their losses in the form of the very digital assets they originally invested in.

When Will FTX Creditors Get Paid?

With the reorganization plan now greenlit, FTX creditors can expect to receive their permitted claims within 60 days, putting the official start of repayment on pace for the second week of December.

However, industry observers caution that the repayment process may take longer to unfold.

Legal experts predict that FTX will continue the repayment process well into 2025, with some claims lasting into the first quarter of 2026.

One silver lining: FTX could settle a significant chunk of claims—nearly $1.1 billion in claims of under $50,000 by the end of the year.

note, the approved FTX plan will likely see ~$1.1bn distributed to small creditors (claims <$50k) before EOY, with the remaining ~$10bn delivered in Q1 or Q2 2025 https://t.co/KLEssOcNA8

— Alex Thorn (@intangiblecoins) October 7, 2024

For larger claims, FTX will begin payments to creditors with claims above $50,000 in 2025, fulfilling around 50% of these claims by the second quarter of that year.

The remaining claims will likely take another year to resolve, bringing a measure of closure to the thousands of creditors still reeling from FTX’s collapse.

Additionally, FTX’s reorganization plan shows that the exchange has set aside $230 million for shareholders, most of which are clients of Sullivan Cromwell , the firm responsible for overseeing the bankruptcy restructuring.

0

Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

PoolX: Locked for new tokens.
APR up to 10%. Always on, always get airdrop.
Lock now!