FTX will return 118% of claims to creditors at prices at the time of the exchange’s collapse

What’s new? The managers of the crypto exchange FTX, which went bankrupt in November 2022 due to fraudulent actions of top management, have presented a new plan to reimburse creditors and customers. Under the plan, 98% of those affected will receive at least 118% of their claims within 60 days after the Delaware Circuit Court approves the document.

Press release

What else is known? The trustees project the total value of the recovered assets, converted to cash and available for distribution, to be between $14,5 billion and $16,3 billion. It includes assets under the company's control, the official liquidators, the Bahamas Securities Commission, the US Department of Justice, and “dozens of private parties that have cooperated in the recovery efforts” of FTX’s assets.

Creditors whose claims do not exceed $50 000 will receive 118%. FTX expects about 98% of users to fall into this category. The remaining creditors will receive 100% of their claims, as well as “billions in compensation,” the amounts of which will be based on the value of the investments at the time they were made.

The plan still calls for assets to be recovered at the time of bankruptcy in November 2022, rather than at current prices, as many creditors have insisted. Bitcoin, for example, has risen more than 200% since the exchange’s collapse, and the total capitalization of the crypto market has grown more than 150%.

Criticizing the plan, among others, was the CEO of crypto custodian BitGo, Mike Belshe:

“0% of FTX creditors agree that receiving $16 800 for your bitcoin is fully compensated. I understand why the bankruptcy process needs to work this way but let's not pretend victims are getting their money back or that FTX wasn’t as awful as it was.”

Source: Twitter.com

The plan also includes settling claims from US authorities including the Internal Revenue Service (IRS), the Commodity Futures Trading Commission (CFTC), and the Department of Justice (DOJ).

Media: FTX sells locked SOL tokens at auction at a rate of about $100

SOL occupies the largest part of the crypto portfolio of the bankrupt exchange

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In March, a US court sentenced FTX founder Sam Bankman-Fried to 25 years in prison for an $8 billion fraud, he was unanimously found guilty by a jury. In April, the businessman appealed the verdict. He argues that the collapse of the exchange was caused by management errors, not fraudulent actions.