- FTX to repay 98% of its users around 119% of their claim value
- Distributions will be made to creditors across more than 200 jurisdictions
- FTX collapsed in November 2022 amid allegations of fraud and customer fund mismanagement
A US judge has approved FTX’s bankruptcy plan to use billions of dollars in recovered assets to repay users nearly two years after the crypto exchange collapsed.
On Monday, Judge John Dorsey in the US Bankruptcy Court for the District of Delaware approved FTX’s plan. By doing so, it enables the exchange’s debtors to repay 98% of users around 119% of their claim value as of November 2022 when the company filed for bankruptcy.
FTX projects the repayment to be between $14.7 billion and $16.5 billion after the total value of the property has been collected and converted to cash.
In a statement, John J. Ray III, CEO and Chief Restructuring Officer of FTX, said: “The Court’s confirmation of our Plan is a significant milestone on our pathway to distributing cash to customers and creditors,” adding:
“The estate is working to finalize arrangements to make distributions to creditors across more than 200 jurisdictions around the world.”
Before its collapse, FTX was a well-known and trusted platform in the crypto space. However, in November 2022, the exchange collapsed because of a lack of liquidity and mismanagement of funds, which eventually saw concerned investors withdrawing large volumes of money.
Sam Bankman-Fried, co-founder and CEO of FTX, was later arrested and sentenced to 25 years in prison for fraud and mismanaging the exchange. Caroline Ellison, former CEO of Alameda Research, was sentenced to 24 months in prison after pleading guilty to charges related to her role in the collapse of FTX.