FTX's reorganization plan has secured approval from over 95% of creditors, but it's now facing significant legal hurdles . The U.S. Trustee and a group of creditors have raised concerns regarding excessive legal protections, unequal treatment of small creditors, and controversial in-kind repayments .
Key Concerns:
- Excessive Legal Protections: The plan provides broad immunity to FTX administrators and advisors, exceeding standard legal safeguards .
- Unequal Treatment of Creditors: Smaller creditors receive lower reimbursement rates (119%) compared to larger creditors (up to 143%) .
- In-Kind Repayments: Creditors demand the option to receive cryptocurrency instead of cash to avoid taxable events .
Confirmation Hearing Scheduled:
A confirmation hearing is set for October 7, 2024, where these concerns will be addressed ². Despite creditor support, the legal challenges may impact the plan's implementation.
FTX Optimistic Outlook:
FTX remains positive, citing widespread creditor approval and a plan that fully compensates non-governmental creditors with interest ³. However, the legal obstacles may delay or alter the reorganization process.
Stay Tuned:
The outcome of the confirmation hearing will determine the fate of FTX reorganization plan. Will the legal challenges be addressed, or will they hinder the plan's progress? Only time will tell.
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FTX Payouts Calculated by K33 Analysts: How Much Will Flow Back Into the Crypto Market?
The approval of FTX’s repayment plan by the US bankruptcy court has sparked excitement among crypto investors. With expectations high for cash payouts, K33 analysts estimate that around $2.4 billion could re-enter the crypto market.
After years of anticipation, the official decision on FTX repayments was finalized last night. As predicted, despite numerous objections, it was determined that users will be paid in cash based on their account values, regardless of the cryptocurrencies held at the time of bankruptcy.
When Will Payments Begin?
K33 Research, a crypto research firm that has previously issued reports on FTX payments, provided key insights into the expected timeline. According to the company’s latest report, released on Tuesday, payments are anticipated to be distributed by the end of this quarter and into the first quarter of 2025.
"Creditors with individual claims under $50,000 will receive payments within a 60-day window," the report stated. K33 estimates this will amount to approximately $1.2 billion. Larger creditor claims, which total around $9 billion, are projected to be paid by February 2025.
Will All the Money Flow Back Into the Crypto Market?
A pressing question for many is how much of these payouts will return to the crypto market—if any at all. K33 analysts crunched the numbers on this topic.
They revealed that around $3.9 billion of the claims, out of a total of $14.4 billion to $16.3 billion, had been acquired by loan funds. According to the analysts, it’s unlikely that this portion of the funds will be converted back into cryptocurrencies.
While expectations are high, only a fraction of the overall amount is expected to find its way back into the crypto ecosystem.

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On October 7, 2024, FTX Trading Ltd. (operating as FTX.com) and its affiliate debtors announced that the U.S. Bankruptcy Court for the District of Delaware confirmed their reorganization plan, less than two years after their historic bankruptcy filing.
Asset Value
In filings on May 8, FTX reported that since filing for bankruptcy, they have recovered and liquidated assets valued between $14.5 billion and $16.3 billion. Under the reorganization plan, approximately 98% of creditors will receive around 119% of their approved claims within 60 days after the plan becomes effective, subject to KYC requirements. The distribution includes assets managed by FTX’s Chapter 11 debtors and various partners like FTX Digital Markets, Ltd. (Bahamas) and FTX Australia.
Payment Timeline
With the plan’s approval, FTX aims to compensate 98% of users within 60 days post-activation of the plan. While the plan is approved, the effective date is not yet determined. FTX creditor Mr. Purple has suggested two timelines: an activation on October 31, potentially allowing payments before year-end, or delays extending payments to early 2025 due to the reserve fund motion expected in November or December.

Impact on FTT
Following the plan’s approval, FTT surged past $3.4, reaching a peak of $3.43 before stabilizing at $2.49.

Broader Impact
The reorganization plan stipulates that 98% of creditors will be compensated in cash at 118% of their claim value based on the November 2022 bankruptcy filing. Remaining creditors are set to receive 100% of their claims, along with additional time-value compensation worth billions. About 94.48% of creditors, representing claims worth $6.83 billion, supported the plan.
Some creditors, including those led by Sunil Kavuri, opposed the plan, preferring direct compensation in cryptocurrency rather than cash-based on 2022 values. However, the FTX liquidation team and the presiding judge opposed this approach.
As the compensation progresses, some funds are expected to re-enter the crypto market, potentially supporting market trends.

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