FTX Hearing Today, Here’s What to Expect

The FTX bankruptcy hearing scheduled for today, October 7, 2024 at 10:00 am ET in Delaware will play a pivotal role in determining how the company’s remaining $16 billion in assets will be redistributed to creditors. This hearing is a critical step in FTX’s ongoing chapter 11 proceedings, which aim to resolve the fallout falling the company’s collapse.

The FTX hearing is happening at 10 am ET today.

The hearing will determine the date of FTX’s $16B cash redistribution. pic.twitter.com/qfpRl5e4CL

— Wealth Mastery by Lark Davis (@WealthMastery_) October 7, 2024

With a debt of over $16 billion and 36000 creditors submitting claims, it is unlikely that today’s hearing will result in immediate payouts to those creditors. Smaller creditors, those who submitted claims below $50,000 are hoping for a quick resolution in this matter. The date of the asset evaluation is one critical issue as the value of cryptocurrency holdings in FTX’s estate is likely to fluctuate due to which delays in the payouts can be expected.

FTX employees Serving Prison Sentences

Four former FTX executives are currently serving prison sentences for their roles in the exchange collapse. They include:

1. Sam Bankman Fried (Founder/CEO): Convicted of fraud, conspiracy and money laundering.
2. Caroline Ellison (Alameda Research CEO): Charged for wire fraud and conspiracy to commit securities fraud.
3. Gary Wang (Co-founder & Chief Technology Officer): Charged for wire fraud and conspiracy. The CTO’s sentence is reduced due to cooperation with investigation.
4. Nishad Singh (Director of Engineering): Charged for wire fraud, securities fraud. The Director’s sentence was reduced due to cooperation with authorities.

The Debt Repayment System

As of now, the court supervised liquidation process aims to repay a massive $16 billion debt owed to creditors, with priorities being established based on creditor hierarchy. The debt repayment system under Chapter 11 bankruptcy proceedings is complex, as there are different categories of creditor – institutional trader, individual trader and employee compete for repayment.

Under the plan framed by FTX, eligible customers with $50,000 in assets will receive up to 118% of their assets value , with 98% of users expected to receive full payment. The repayment timeline is set for distribution within 60 days of court approval, with payments to be made in US dollars based on valuation at the time of collapse.

Today’s hearing will establish a timeline and further clarify the mechanisms for distributing the remaining assets which offers a glimmer of hope for customers seeking resolution.

Also Read: X Empire Reveals Final Tokenomics and Airdrop Plan