In a monumental move, FTX has finally received court approval for its long-awaited bankruptcy plan, set to repay customers with up to $16.5 billion in recovered assets. U.S. Bankruptcy Judge John Dorsey greenlit the plan during a hearing in Wilmington, Delaware, calling it a groundbreaking strategy for handling complex crypto bankruptcy cases. This plan unites settlements with FTX customers, creditors, government agencies, and international liquidators.
๐ฏ Whatโs the Goal?
FTX aims to repay 98% of its customers, especially those with balances of $50,000 or less on the platform. The repayments are expected to roll out within 60 days of the plan's effective date, which is still to be determined. For many customers, this news brings long-awaited relief following FTXโs collapse in 2022 after the misuse of funds by its founder, Sam Bankman-Fried, who was sentenced to 25 years in prison earlier this year (and is currently appealing).
๐ฌ Customer Reactions: Mixed Feelings
While many are eager for the payouts, reactions have been mixed. Customers who held cryptocurrency like Bitcoin are concerned about receiving repayments based on 2022 prices, when assets were significantly lower. For instance, Bitcoin was worth $16,000 during the bankruptcy, but today it has surged past $63,000! Critics, like creditor lawyer David Adler, argue that FTXโs claim of a "100% recovery" doesnโt reflect the massive rise in crypto prices since the collapse. FTX, however, clarified that returning the original crypto assets is impossible, as most were misappropriated.
โ๏ธ Whatโs Next?
FTX is still negotiating with the U.S. Department of Justice over an additional $1 billion in seized assets. The exchange has already recovered billions through asset sales and aims to repay creditors up to 118% of their November 2022 account values. Despite pushback, the court ruled that cash-based repayments will proceed, rather than returning the original crypto.
Though the journey has been long and tough, hope is finally on the horizon for those affected by FTXโs collapse. ๐
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