tl;dr
FTX, a bankrupt cryptocurrency exchange, has proposed a reorganization plan that would repay 98% of its creditors with 118% of their claims in cash within 60 days of court approval. Non-governmental creditors would receive 100% of their claims plus up to 9% interest. The plan is subject to approval ...
FTX, a bankrupt cryptocurrency exchange, has proposed a reorganization plan that would repay 98% of its creditors with 118% of their claims in cash within 60 days of court approval. Non-governmental creditors would receive 100% of their claims plus up to 9% interest. The plan is subject to approval by the Delaware bankruptcy court.
The estate expects to have $14.5-16.3 billion in cash available for distribution. The plan also settles claims from regulators and government agencies.
Former FTX CEO, Sam Bankman-Fried, who was convicted of fraud, argued that customers getting their money back should mitigate his sentence.
FTX's new reorganization plan, proposed in new documents filed Tuesday evening, would see 98% of its creditors get back 118% of their claims – in cash – within 60 days of court approval. Other non-governmental creditors would get back 100% of their claims plus up to 9% interest.
The proposed payouts are higher than earlier estimates from the FTX estate. In a Tuesday press release, the FTX estate said it expects to have between $14.5 and $16.3 billion in cash available for distribution by the time a plan is approved by a Delaware bankruptcy court.
The estate denies that the market recovery is the driving force behind its massive pile of cash, stating that it's the result of a year-and-a-half of scraping together the company’s scattered assets around the world and liquidating them.
FTX's new reorganization plan would also settle claims from regulators and government agencies, including the Internal Revenue Service (IRS) and U.S. Commodity Futures Trading Commission (CFTC).
There are also plans for a special fund created to make “supplemental restitution” to certain customers and creditors. A hearing to discuss the proposed plan is scheduled for June.
Former FTX CEO and convicted fraudster Sam Bankman-Fried previously attempted to use the estate’s ability to pay back customers in full as evidence that the collapse of his exchange had “zero” harm to its customers.
Bankman-Fried was sentenced to 25 years in prison and plans to appeal his sentence and conviction.
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