what happen?
A U.S. judge approved FTX’s bankruptcy repayment plan. The repayment amount is expected to reach US$1.26 billion to US$1.65 billion, and victims will receive full compensation.
As the cryptocurrency market rebounded significantly during the bankruptcy, coupled with FTX's asset disposal strategy, including the sale of its shares in artificial intelligence company Anthropic, the victims were ultimately able to receive between 118% and 140% of their assets.
While most victims expressed support for FTX’s repayment plan, some were dissatisfied with the repayment in the form of cash because they wanted to be able to receive cryptocurrency as a form of compensation.
Cash repayment sparks controversy, FTT token value set at zero
According to FTX’s bankruptcy plan, most users (creditors holding amounts below $50,000) can receive approximately 118% compensation, while some creditors can even receive 142% compensation for their losses.
However, all repayments will be made in cash. In other words, the increase in the value of crypto assets in recent years has nothing to do with the victims. What's more, when FTX filed for bankruptcy protection, the price of Bitcoin dropped to about US$16,000, and now the price of Bitcoin is about US$62,000, which is a considerable price difference.
Although most victims expressed considerable support for FTX’s repayment plan, some people were dissatisfied with the repayment method in the form of cash or the valuation of FTT tokens, because they still hope to use cryptocurrency as the main method of compensation.
The decision was made primarily because at the time of FTX’s bankruptcy, the number of cryptocurrencies held by the exchange was significantly lower than the amount shown on the platform. In addition, FTX’s native token FTT has been defined by the court as “valueless”. Because the FTX exchange has closed down, the token has no basis for appreciation.
Still, the price of FTT tokens rose by 55% following news of the court’s approval of the repayment plan.
FTX’s progress and challenges in repaying victims
At the beginning of the FTX collapse, the company's assets were almost depleted. At that time, there were only 105 Bitcoins left on the exchange, and it was simply impossible to meet the needs of repaying all users.
However, with the subsequent sale of shares in Robinhood, Anthropic and other companies, as well as the realization of other assets, FTX recovered part of the funds and was finally able to repay users' assets.
Although the repayment plan has been approved by the court, the actual distribution of funds will still take time. Because FTX must also set up a trust fund and find a specialized company to be responsible for fund distribution. In addition, under the bankruptcy plan, shareholders may also be able to obtain a portion of the seized funds, which may be up to 18%.
In any case, FTX’s bankruptcy repayment plan is undoubtedly a rare victory for the cryptocurrency industry, especially in such a complex situation, full or even over-repayment can be achieved. For victims and shareholders, this two-year wait has finally seen the dawn of hope, but it is certain that some people will be dissatisfied no matter what.
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