A US bankruptcy court has greenlit FTX’s plan to distribute between $14.7 billion and $16.5 billion worth of payouts to the crypto exchange’s former customers.
The plan calls for 98% of the exchange’s creditors to receive approximately 119% of the value of their holdings on the day FTX filed for bankruptcy in November 2022, per a recent press release.
The increased payouts are thanks to higher crypto prices and FTX’s 8% stake in the AI (artificial intelligence) safety and research company Anthropic.
FTX’s creditors’ digital asset claims are denominated in dollars and based on the near-bottom crypto prices at the time of the disgraced exchange’s collapse in November 2022. Crypto prices had already cratered at the time due to the FTX turmoil and the related contagion spreading throughout the sector.
FTX chief executive John J. Ray III thanked the case’s team in a statement, noting they recovered billions of dollars by rebuilding the exchange’s books and “marshaling assets from around the globe.”
“Looking ahead, 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 around the world. In preparation for this process, we are finalizing agreements to retain specialized agents to assist us in getting recoveries to customers around the world as safely and expeditiously as possible.”
Ray III took over for disgraced former CEO Sam Bankman-Fried after the exchange filed for bankruptcy.
Last November, a US jury found Bankman-Fried guilty of wire fraud and conspiracy to commit wire fraud against FTX’s customers, wire fraud and conspiracy to commit wire fraud against Alameda’s lenders, conspiracy to commit securities fraud against FTX’s investors, conspiracy to commit commodities fraud against FTX’s customers and conspiracy to commit money laundering.
In March, Judge Lewis A. Kaplan sentenced the former CEO to 25 years in prison and three years of supervised release. He also ordered the 32-year-old to pay $11 billion in forfeiture. Bankman-Fried is appealing his conviction and sentence.
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Source: https://dailyhodl.com/2024/10/09/us-court-approves-ftx-bankruptcy-plan-to-distribute-up-to-16500000000-worth-of-payouts-to-former-customers/