FTX Crypto Holders to Recover Only 10-25% of Lost Assets, Sets $230M for Shareholders ‼️
Collapsed crypto exchange FTX has made last-minute changes to its payout plans, setting aside only 10-25% for FTX crypto holders.
Further, FTX has allocated $230 million worth of proceeds from government forfeiture actions for the benefit of shareholders. According to FTX creditor-activist Sunil Kavuri, the firm is transferring “18% of DOJ forfeiture funds,” to FTX equity holders.
The revised reimbursements came as a surprise to creditors, who were unaware of the provision. The agreement was apparently finalised after the creditors voted on a liquidation plan and was revealed 30 days after the deadline.
Traditionally, in a Chapter 11 bankruptcy proceeding, shareholders are reimbursed last after creditors. The filing noted that both debtors and preferred shareholders “ each have an interest in avoiding the cost, expense and delay that would be associated with litigation in connection with the Plan and the Forfeiture Proceeds.”
In the revised agreement, “extra money is being transferred to shareholders,” Sunil explained in an X chat. He added that creditors would receive reimbursements according to the petition date when crypto prices were lower than today
For instance, Bitcoin was trading at $16,000 when the legal petition was filed. However, the largest crypto trades at $64.47 at press time, sparking outcry among FTX creditors.
