FTX has received court approval to proceed with its bankruptcy plan, almost two years after the crypto exchange collapsed and filed for bankruptcy in November 2022.
This proposal outlines how the exchange’s debtors will distribute funds, aiming to restore about 119% of users’ claimed account balances, ultimately repaying 98% of users.
The plan was confirmed by Judge John Dorsey of the US Bankruptcy Court in Delaware on October 7.
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John J. Ray III, FTX’s current CEO and chief restructuring officer, called this court decision a significant achievement on the path to reimbursing creditors. He noted:
Looking ahead, we are poised to return 100% of bankruptcy claim amounts plus interest for non-governmental creditors through what will be the largest and most complex bankruptcy estate asset distribution in history.
Despite the optimism from the FTX leadership, critics say the plan misses out on the potential gains users could have made as crypto prices soared. For example, Bitcoin was worth about $16,000 when FTX went bankrupt but is now over $63,000, making creditors like Sunil Kavuri voice concerns that users will only recover 10-25% of their crypto’s current value.
Several former FTX executives have faced legal consequences. Sam Bankman-Fried, the former CEO, was sentenced to 25 years in prison earlier this year, while Caroline Ellison, who led Alameda Research, received a two-year sentence for her involvement in the collapse.
With billions at stake, the FTX liquidation could shape user recovery and have a ripple effect on the broader crypto market.
Gode is a Web3 Market Analyst who researches the most important industry events and interprets how they affect the wider Web3 space. Her formal education in media culture & digital rhetoric allows her to employ a methodical approach to evaluating critical Web3 news data, including large-scale events and the wider social sentiment within the ecosystem.
Gode is a mutilingual professional, having studied in multiple universities all across Europe. This allows her to have a one-of-a-kind opportunity to analyze Web3 social sentiments spanning different cultures and languages and, in turn, develop a much deeper understanding of how the Web3 space is growing within different communities. With the rest of her team, Gode works to identify crucial crypto news patterns and provide unbiased and data-driven information.
Gode’s passions include working and communicating with people, and when she’s not researching Web3 news, she spends her time traveling and watching true crime documentaries.
