Collapsed crypto exchange FTX has floated a revised proposal that could see more than 90% of creditor holdings that were held at the exchange prior to its November 2022 implosion returned to them by the end of the second quarter of 2024.
As per a statement released on Monday, the debtors’ group overseeing the bankruptcy process intends to submit a formal filing of the plan with a U.S. Bankruptcy Court by December 16, 2023.
FTX unexpectedly went under last November due to alleged criminal mismanagement. Former FTX CEO Sam Bankman-Fried is now two weeks into his fraud trial on issues relating to his involvement in the exchange’s implosion.
“The FTX Debtors estimate that customers of FTX.com and FTX US would receive, collectively, over 90% of distributable value worldwide if the Amended Plan […] is approved by the Bankruptcy Court by the end of the second quarter of 2024,” the announcement says.
Terms Of The Proposed FTX Settlement Plan
Under the proposal, missing customer assets will be divided into three pools based on circumstances at the start of the Chapter 11 cases: Assets segregated for FTX.com customers; Assets for FTX.US customers; and a “General Pool” of other assets.
Customers with a preference settlement amount not more than $250,000 would be able to accept the settlement without any reduction of claim or payment. Preference settlement is 15% of customer withdrawals on the platform, nine days before it crumbled.
Creditors would additionally get a “Shortfall Claim” against the general pool corresponding to the estimated value of assets missing at their exchange. The shortfall claim is estimated to be nearly $9 billion for FTX.com and $166 million for FTX.US.
FTX notes that customers of both exchanges will not be paid in full “with greater percentage losses by customers of FTX.com.”
That said, the new CEO and chief restructuring officer of FTX, John J. Ray III, described the plan to return creditor funds as “another major milestone in our case”, adding:
“Together, starting in the most challenging financial disaster I have seen, the debtors and their creditors have created enormous value from a situation that easily could have been a near-total loss for customers.”
If granted approval by the U.S. Bankruptcy Court, FTX expects these funds to be disbursed by next June.
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- Source: https://zycrypto.com/ftx-customers-may-see-90-of-their-funds-returned-by-next-june-thanks-to-an-amended-proposal/
