FTX, the defunct crypto exchange, has received court approval to execute its bankruptcy plan, allowing the refund of customers up to $16.5 billion in recovered assets. U.S. Bankruptcy Judge John Dorsey praised the plan as a model for managing large and complex bankruptcies.
According to the plan , FTX will first focus on repaying its clients before it tends to the demands of the government regulators. The exchange intends to repay 98% of clients who had $50,000 or less on the platform by the 60th day after implementing the plan. The repayment schedule has not yet been established.
Source: X
The FTX exchange fell in 2022 when it was revealed that SBF had used the customers’ funds to rescue his trading company, Alameda Research. Bankman-Fried has been in prison for 25 years but is attempting to appeal the verdict.
The company believes it will have between $14.7 billion and $16.5 billion for repayments, which should be enough to provide at least 118% of the account balances as of November 2022 when FTX filed for bankruptcy. The American departments have reached a consensus to allow FTX to pay back the customers before fines and taxes.
For instance, while Bitcoin was at $16,000 when FTX was still operational, the value is over $62,700 at the time of writing this. The customers who deposited Bitcoin on the exchange believe that the repayments are not proportional to the current prices.
FTX’s CEO John Ray said this was due to the hard work of the team that put together FTX’s record and traced the assets worldwide. The company also raised money through sales of investment products like stocks in the Artificial Intelligence start-up Anthropic.
FTX is in discussion with the U.S. Department of Justice for $1 billion in the frozen fund that may provide more reimbursement to its shareholders.
