Customers to Get $9B Claim Payout by 2024

October 17 came up with good news for FTX customers, mainly in terms of their assets invested in FTX, one of the leading cryptocurrency exchanges. It’s been a year, the company is bankrupt and alleged for falsely using the customer’s funds. In succession to the ongoing case, the bankrupt company is expected to repay the customer’s funds by mid-2024.

FTX Bankruptcy Case

FTX, one of the most successful and leading cryptocurrency exchanges collapsed in a matter in November 2022. One of the investors filed a class action lawsuit against FTX and its CEO, Sam Bankman-Fried. Sam is alleged of moving up to $10 Billion in FTX customer funds to Alameda. Such a scenario simply resulted in enhanced customer withdrawal and thus, the whole company was bankrupted.

Currently, Sam is under a two-week fraud trial on matters associated with the collapse to bankruptcy. In succession, the case is expected to reach an end by 2024. A proposed settlement is assumed to see creditors receive a shortfall claim of $9 Billion by mid-2024.

On October 16, FTX debtors filed a notice to highlight the ongoing case proposed settlement with a Delaware-based US bankruptcy court. After filling out the notice, the FTX debtors are sure about reaching the major milestone of the case. The statement was made after an extensive discussion with the unsecured creditors’ committee, a committee of non-United States customers. However, the FTX investors need to submit an official filing by December 16 seeking the court’s approval.

As a part of the amended plan, FTX.com and FTX.US would collectively receive 90% of assets available for distribution. John J Ray III, the current CEO and chief restructuring officer of FTX is in the way to handle one of the most challenging financial disasters.

As per the plan, the FTX divides the assets into three categories including general pool, FTX.com customers, and US customers. However, for now, only the FTX.com and US customers are included in the shortfall claim.

Is it a Relief for FTX Customers?

If the Delaware-based US bankruptcy court approves the settlement, the FTX customers will have their good days. Based on the observations, as a part of the plan, customers who withdrew around $250,000 from the FTX exchange within nine days of bankruptcy will get a claim of 15% of the amount. Also, customers with less than $250,000 wouldn’t get any reduction.

In addition to this, FTX has the power to exclude any of the customer, insider, and affiliates from the plan who intends to misuse the customer’s deposits and corporate funds. The plan is supposed to be executed in mid-2024.

Conclusion

A notice filed by FTX investors on October 16, sought the attention of the court towards the FTX bankruptcy case. If the court approves the settlement, the FTX customers will get their assets by mid-2024. The repayment of the asset is categorized into three groups including FTX.com, FTX.US, and general pool.