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FTX To Distribute $6 Bln To Users, Here’s Potential Timeline – Crypto News

Published

2 years ago

October 2, 2024

Dripp

After careful consideration of the FTX reorganization plan, the beleaguered cryptocurrency exchange will eventually distribute $6 billion to users. Notably, the beneficiaries are entities that were affected when the firm imploded in 2022. The reorganization plan was presented earlier to get the opinion of an ad hoc committee, which have now favored it.

Unexpected Support From Creditors

FTX has seen strong creditors’ backing, which sets the tone for the distribution of $6.83 billion to all impacted traders and users. About 94% of the voting creditors listed in the “dot com customer entitlement claims” class voted in favor of the plan. All committee members, about 66 of them, voted YES to the proposal, marking a crucial step to the distribution of FTX creditors’ assets.

According to Kroll Restructuring Administration which is responsible for soliciting votes, nearly all classes of creditors supported the proposal. The only two classes that did not return their votes were presumed to be in favor of the FTX reorganization plan. The success recorded so far with the plan has prompted observers to say that the confirmation hearing scheduled for October 7 is only a formality.

Analyst Tom Dunleavy believes that the distribution would take place within the next 4 to 8 weeks. By all means, the distribution should be finalized before the end of this year for all creditors that registered their claims. Coingape earlier reported that the FTX repayments will commence after three “omnibus hearings” scheduled for October 22, November 20, and December 12.

FTX Reorganization Plan And Creditors Allocation

For the allocation, 89.1% of creditors who fall into the “US customer entitlement claims” category will receive $60.99 million. Also, 95.88% of creditors in the “dotcom convenience claims” class, will get $223.59 million in claims. Most of these creditors are likely to receive a minimum of 118% of their claims in cash.

However, it is worth noting that these claims were calculated based on the cryptocurrencies market value as of when they were filed. Since this calculations were not made based on their current value, these creditors will see some losses.

In addition to this plan, John Ray III, the CEO and Chief Restructuring Officer of FTX, noted that the plan is keen on fully reimbursing non-governmental creditors. This is to the point of returning 100% of their claims plus interest, while also resolving complex disputes with both governmental and private entities.

Meanwhile, some of the masterminds behind the exchange have all faced the consequences for their actions. Caroline Ellison, former Alameda Research CEO, recently received a two years sentence for her role in FTX collapse. Former CEO of FTX, Sam Bankman-Fried, is still serving his 25 years jail term.