FTX Plans Over $6B Distribution to Affected Users
Following a thorough review of the FTX reorganisation plan, the struggling cryptocurrency exchange has committed to distributing $6 billion to users impacted by its 2022 collapse.
FTX To Distribute $6 Bln To Users, Here’s Potential Timelinehttps://t.co/16Grh7NkzR
— John Morgan (@johnmorganFL) October 1, 2024
This distribution aims to benefit those individuals and entities adversely affected by the firm's downfall.
The restructuring plan has been submitted to a special committee, which has expressed strong support for the initiative, paving the way for the much-anticipated recovery process.
FTX Creditors Offer Unexpected Support
FTX has garnered substantial support from creditors, paving the way for the distribution of $6.83 billion to affected investors and users.
Approximately 94% of creditors in the "dot com customer entitlement claims" class voted in favour of the plan, with all 66 committee members endorsing the proposal.
This strong backing signifies a critical step toward distributing FTX's assets.
According to Kroll Restructuring Administration, which oversees the voting process, nearly all creditor classes supported the plan, with only two abstaining, though their support is also presumed.
🚨#FTX Update: It's Official! 🚨
The Bankruptcy Plan is a DONE DEAL 💯📝. Voting report confirms ALL classes voted YES! Plus, ad-hoc group just filed in SUPPORT of confirmation! 📈💥 - The Confirmation Hearing on the 7th is now a formality at this point. #BreakingNews #Crypto… pic.twitter.com/hjONyd3Hjr
— Thomas Braziel (@ThomasBraziel) October 1, 2024
The plan's success has led observers to anticipate that the confirmation hearing scheduled for 7 October will be largely procedural.
Analyst Tom Dunleavy suggests that distribution could occur within the next four to eight weeks, aiming for completion before year-end for all registered creditors.
FTX deal officially done. $6B incoming back to investors in the next 4-8 weeks. https://t.co/XYVQN7Eco8
— Tom Dunleavy (@dunleavy89) October 1, 2024
FTX repayments will begin following three "omnibus hearings" set for22 October, 20 November, and 12 December.
Reimbursement Plans from FTX
Under the allocation plan, 89.1% of creditors categorised under "US customer entitlement claims" will receive a total of $60.99 million, while 95.88% of those in the "dotcom convenience claims" class will get $223.59 million.
Most of these creditors are expected to receive at least 118% of their claims in cash.
However, it is important to note that these claims were calculated based on cryptocurrency market values at the time they were filed, not their current values, which may result in some losses for creditors.
Additionally, John Ray III, CEO and Chief Restructuring Officer of FTX, emphasized the plan's commitment to fully reimbursing non-governmental creditors, aiming to return 100% of their claims along with interest, while also addressing complex disputes with both government and private entities.
Ray stated:
“Our plan focuses on fully reimbursing non-governmental creditors.”
The current CEO of FTX is John J. Ray III, who specializes in recovering funds from failed corporations.
— MEGA REDO (@mega_redo) October 2, 2024
FTX’s anticipated $6 billion distribution is expected to significantly enhance liquidity in the cryptocurrency markets and may help users recover some of their losses.
