Key Points:
The FTX bankruptcy plan could see up to $16 billion in recovered assets distributed to FTX creditors. Judge John Dorsey of the U.S. District of Delaware Bankruptcy Court approved it on Oct. 7.
The approval comes two years after the cryptocurrency exchange went bust, affecting thousands of customers across the globe. According to the plan, 94% of claimants had supported-98% of creditors are set to receive 118% of their claims in cash. Not everyone supported the option to get some money repaid, though: Sunil Kavuri, representative of the most significant creditor community of FTX, had been pushing for in-kind repayments, particularly in cryptocurrencies. This plan was denied by Judge Dorsey because the value of the native token of FTX was reduced almost to zero, and there was little chance of recovery.
Read more: FTX Repayment Plan Changes Leave Creditors Feeling Scammed Twice
The settlement effectively ends the mounting cases against FTX bankruptcy, once the leading centralized crypto exchange that imploded in 2022. It emerged that its founder, Sam Bankman-Fried, along with other executives, siphoned customer funds and prepared deceptive financial statements. In response, users and U.S. authorities levelled fraud allegations.
Within days of the Chapter 11 filing, Bankman-Fried and a handful of FTX’s top executives were arrested. In a whirlwind trial, Bankman-Fried was convicted and sentenced to 25 years in prison. He has filed an appeal citing judicial bias.
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