In a significant development for the beleaguered crypto exchange FTX, a US judge has greenlit a bankruptcy plan that will allow the company to repay users nearly two years after its dramatic collapse.
Judge John Dorsey of the US Bankruptcy Court for the District of Delaware approved the plan, which aims to return 98% of users’ claims, translating to approximately 119% of their claim value as of November 2022, when FTX filed for bankruptcy.
FTX anticipates that the total repayment will range between $14.7 billion and $16.5 billion, contingent on the successful liquidation of its recovered assets.
John J. Ray III, the CEO and Chief Restructuring Officer of FTX, hailed the court’s decision as a pivotal step towards distributing funds to affected customers and creditors, emphasizing the estate’s commitment to managing distributions across over 200 jurisdictions globally.
Once a trusted name in the cryptocurrency arena, FTX’s downfall in November 2022 was attributed to liquidity issues and poor financial management, leading to a mass exodus of investor funds.
The exchange’s co-founder, Sam Bankman-Fried, was subsequently arrested and sentenced to 25 years in prison for fraud, while former Alameda Research CEO Caroline Ellison received a 24-month sentence after admitting her involvement in the “fraud”.
