Big event in the cryptocurrency circle!
Are you still holding this coin? Run!
The FTX bankruptcy hearing is scheduled for today (October 7, 2024, 10:00 AM EST) in Delaware and will play a key role in determining how the company's remaining $16 billion in assets will be redistributed to creditors. The hearing is a key step in FTX's ongoing Chapter 11 process to address the consequences of the company's collapse.
With debts exceeding $16 billion and 36,000 creditors making claims, it is unlikely that today's hearing will result in immediate payments to these creditors. Smaller creditors (i.e., those with claims of less than $50,000) hope that the matter will be resolved as soon as possible. The asset valuation date is a key issue because the value of the cryptocurrency holdings in FTX's assets can fluctuate, so delays in payments can be expected.
Four former FTX executives are currently serving prison sentences for their roles in the exchange's collapse. They include:
Sam Bankman Fried (Founder/CEO): Convicted of fraud, conspiracy and money laundering.
Carolyn Ellison (CEO of Alameda Research): Charged with wire fraud and conspiracy to commit securities fraud.
Gary Wang (Co-founder and CTO): Charged with wire fraud and conspiracy. The CTO’s sentence was reduced for cooperating with the investigation.
Nishad Singh (Director of Engineering): Charged with wire fraud, securities fraud. The director’s sentence was reduced for cooperating with authorities.
The current court-supervised liquidation process aims to repay the huge $16 billion debt owed to creditors and prioritize repayment based on the creditor hierarchy. The debt repayment system under Chapter 11 bankruptcy proceedings is very complex because there are different categories of creditors - institutional traders, individual traders and employees are all vying for repayment rights.
Under the plan established by FTX, eligible customers with assets of $50,000 will receive repayment of up to 118% of the value of their assets, and 98% of users are expected to be fully repaid. The repayment time is set to be issued within 60 days after court approval, and the repayment will be paid in US dollars based on the valuation at the time of bankruptcy.
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