FTX plans full pay back of all creditors ‘plus billions in compensation’
FTX wants to give 98% of its creditors up to 118% of their allowed claims, while the rest will get fully repaid plus “billions in compensation for the time value of their investments.”
In a May 7 statement , the bankrupt crypto exchange said the plan was "subject to being finalized and approved” by a Delaware Bankruptcy Court.
“We are pleased to be in a position to propose a Chapter 11 plan that contemplates the return of 100% of bankruptcy claim amounts plus interest for non-governmental creditors,” said FTX CEO and chief restructuring officer John J. Ray III.
It’s a reversal from FTX’s former plan which saw creditors reimbursed for the value of their assets at the time of its bankruptcy in November 2022.
Since then, the crypto markets have seen a resurgence, with Bitcoin ( BTC ) rising by over 200%.
FTX estimated the total value of property collected, converted into cash to be distributed to creditors will range between $14.5 and $16.3 billion.
Figures from FTX's amended reimbursement plan. Source: FTXOnly creditors holding claims in an allowed amount below $50,000 will be eligible for the 118% recovery, should it be approved by the bankruptcy court.
The proposed repayment would occur within 60 days after the effective date of the plan.
Related: Bankruptcy judge signs off on $450M FTX-Voyager settlement
The $32 billion cryptocurrency exchange collapsed in November 2022, revealing a $8 billion hole that its new management has been trying to recover in the years following.
Among those efforts include a $884 million sale of shares in artificial intelligence firm Anthropic in March, which accounted for a majority of FTX's stake in the firm.
FTX confirmed in January that its restructuring plans will not include a reboot of the cryptocurrency exchange, which was among the largest platforms by trading volume prior to it collapsing.
Magazine: Deposit risk: What do crypto exchanges really do with your money?
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