FTX, the defunct crypto exchange, has received court approval to execute its bankruptcy plan, allowing the refund of customers up to $16.5 billion in recovered assets. U.S. Bankruptcy Judge John Dorsey praised the plan as a model for managing large and complex bankruptcies.
According to the plan, FTX will first focus on repaying its clients before it tends to the demands of the government regulators. The exchange intends to repay 98% of clients who had $50,000 or less on the platform by the 60th day after implementing the plan. The repayment schedule has not yet been established.
The FTX exchange fell in 2022 when it was revealed that SBF had used the customers’ funds to rescue his trading company, Alameda Research. Bankman-Fried has been in prison for 25 years but is attempting to appeal the verdict.
The company believes it will have between $14.7 billion and $16.5 billion for repayments, which should be enough to provide at least 118% of the account balances as of November 2022 when FTX filed for bankruptcy. The American departments have reached a consensus to allow FTX to pay back the customers before fines and taxes.
For instance, Customers are disappointed with FTX’s recovery plan, feeling it doesn’t reflect the recent rise in crypto prices since the market bottomed in 2022. Attorney David Adler highlights that Bitcoin’s price has surged from $16,000 to over $63,000, making the 100% recovery claim hard for depositors to accept.
FTX stated that it cannot simply return customers’ crypto assets because they are gone, misappropriated by Bankman-Fried. CEO John Ray explained that the team worked hard to trace the assets worldwide while the company also raised funds by selling investment products like stocks in the AI startup Anthropic.
FTX is in discussion with the U.S. Department of Justice for $1 billion in the frozen fund that may provide more reimbursement to its shareholders.
Also Read: FTX Estate to Auction 22.3m Locked Worldcoin Tokens at a Discount
