FTX Asset Compensation Plan Officially Approved!

On October 8, US Bankruptcy Judge John Dorsey of the District Court of Delaware approved a property recovery plan for users of the FTX exchange.

This decision was made 2 years after the historic collapse of the FTX exchange (late 2022) - contributing to the entire Crypto market and Bitcoin bottoming at 16,000 USD at that time.

On October 8, US Bankruptcy Judge John Dorsey of the District Court of Delaware approved a property recovery plan for users of the FTX exchange.

This decision was made 2 years after the historic collapse of the FTX exchange (late 2022) - contributing to the entire Crypto market and Bitcoin bottoming at 16,000 USD at that time.

“The court’s confirmation of the compensation plan is an important milestone on our path to distributing cash to our customers and creditors,” said John J. Ray, FTX’s chief restructuring officer.

“Looking ahead, we are prepared to repay 100% of the bankruptcy claim plus interest to non-government creditors through the largest and most complex bankruptcy distribution in history,” Ray added.

Not everyone is happy with FTX’s compensation plan, however. Sunil Kavuri, an FTX creditor who attended the bankruptcy hearing, said that most users will only receive 10%-25% of their account value.

The reason is that creditors may also be subject to tax under US law if they are compensated in cash instead of Crypto. Currently, FTX has not yet disclosed the exact time when it will start refunding users.

Following the collapse of the FTX exchange, CEO Sam Bankman-Fried was sentenced to 25 years in prison. Recently, former Alameda Research CEO Caroline Ellison was also sentenced to 2 years in prison.

After news of the compensation plan being approved, the FTT token price immediately exploded with a nearly 40% increase in just 1 hour.

However, the price of FTT has dropped to around $2.61 at the time of writing - up nearly 5% in the past 24 hours. FTT is also a coin with good performance in recent days, especially in the top 100 coins with the best performance in the past week (September 30 - October 6).

At the latest court hearing, US bankruptcy judge John Dorsey even rejected the option of repaying creditors in kind because he believed that the actual value of FTT was “zero”.