FTX Aims to Distribute $6 Billion

Cryptocurrency exchange FTX$FTT

As part of its restructuring plan, it plans to distribute a total of $6 billion to users affected by the crash in 2022. This plan is supported by a large majority of creditors and the distribution is expected to be completed by the end of the year.

FTX’s restructuring process was presented to a special committee, which gave a positive assessment of the plan. The company has taken a significant step toward a $6.83 billion distribution with strong creditor support. Approximately 94% of creditors in the “dot com customer claims” category approved the plan. Additionally, committee members (66) voted for the proposal, supporting the distribution of FTX’s creditor assets.

In a voting process conducted by the Kroll Restructuring Administration, nearly all classes of creditors supported the proposal. Only two classes did not vote, but those classes are also believed to support the plan. Analyst Tom Dunleavy said the distribution would occur in the next four to eight weeks and is likely to be completed by the end of the year.

FTX Refunds

Under the restructuring plan, 89.1% of creditors in the “US customer claims” category will receive a total of $60.99 million. 95.88% of creditors in the “dotcom convenience claims” category will receive $223.59 million. These creditors expect to receive at least 118% of their claims in cash. However, since these calculations are based on the cryptocurrency market value at the time the claims were made, some losses may be incurred.

“Our plan focuses on fully repaying non-governmental creditors,” said John Ray, FTX CEO and Chief Restructuring Officer. Ray noted that they aim to repay 100% of non-governmental creditors’ claims plus interest, and that they aim to resolve complex disputes.

Executives involved in the FTX scam continue to face charges. Former Alameda Research CEO Caroline Ellison was sentenced to two years in prison for her role in the collapse of FTX, while former FTX CEO Sam Bankman-Fried received a 25-year sentence and is facing appeals.

The $6 billion distribution that FTX will make to its users is expected to provide significant liquidity support to the cryptocurrency markets. The successful completion of the distribution process may compensate some of the losses suffered by the users.