Bittime -In the midst of the bankruptcy crisis that hit FTX, now a glimmer of hope appears for creditors. A newly proposed reorganization plan brings good news, namely that almost allFTXwill receive full settlement of their claims.
What's more, they can even potentially receive additional cash on top of that amount. This windfall was possible because FTX managed to recover billions of dollars more than previously expected to cover customer losses from the November 2022 crash.
FTX Successfully Raises $15 Bn
Source: https://twitter.com/FTX_Official/
FTX disclosed that it raised about $15 billion, primarily from the sale of venture capital investments made by the exchange and its affiliate, Alameda Research. This amount is enough to fully pay off almost all creditors with claims under $50,000 (representing 98% of creditors).
Remaining creditors will also receive significant recoveries, with a minimum payment of 118% of their claims. The defunct exchange's reorganization plan isn't just about paying off creditors.
Also Read: Sam Bankman-Fried: Profile, Biography, FTX, and His Arrest
Court documents reveal that the plan also includes potential additional compensation to account for the time value of money lost since FTX's bankruptcy. This means that customers not only get their money back, they may also receive interest on it.
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Justice for FTX Victims?
The payments to more than 2 million customers are a rare occurrence in typical US bankruptcies, where creditors often receive only a small portion of what they are owed.
Some creditors, depending on the type of their claim, can see recoveries of up to 142%, meaning they get back more than they initially lost.
FTX's payout plan is much better than initial estimates. Back in October, the company estimated it would only refund 90% of customers' funds. The outlook improved in January when CEO John Ray III told the court he expected full payments to customers.
Also Read: FTX Sells Digital Custody to CoinList at Discount Price
FTX is expected to have a significant cash surplus ($16.3 billion) after selling all its assets, according to the filing. This is more than enough to cover what is owed to customers and other non-government lenders (approximately $11.2 billion).
"Debtors and their stakeholders have time to explore strategic options and platforms for monetizing illiquid and volatile investments gradually over time," the filing said.
Sale of FTX Assets to Pay Off Creditors
FTX has been aggressively selling its assets to raise the funds needed to pay creditors. This includes investments made by FTX and its affiliates, such as an 8% stake in AI startup Anthropic. The shares were sold to institutional investors for a total of $884 million last March.
The proposed distribution plan remains subject to formal approval by the Delaware bankruptcy court. Even if approved, disbursement of funds to creditors and account holders will likely take several months, as FTX navigates the final stages of its bankruptcy process.
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FTX's Hope Amid Uncertainty
While this reorganization plan brings good news to FTX's creditors, many questions remain. What happens to the "Whale" (large investors) who have significant claims?
Will they receive different treatment? What about the FTX employees who lost their jobs due to bankruptcy?
The future of FTX is still shrouded in uncertainty. However, this reorganization plan provides a glimmer of hope for creditors who have long been waiting for a resolution to their claims.
Only time will tell if this plan will work and bring justice to all parties involved in the FTX tragedy.
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How to Buy Bitcoin (BTC) on Bittime
You can buy and sell Bitcoin (BTC) in an easy and safe way via Bittime . Bittime is one of the best crypto applications in Indonesia which is officially registered with Bappebti.
Bitcoin (BTC) is available on Bittime with the market pair BTC/IDR . To be able to buy BTC/IDR at Bittime, make sure you have registered and completed identity verification. Apart from that, also make sure that you have sufficient balance by depositing some funds into your wallet. For your information, the minimum purchase of assets on Bittime is IDR 10,000. After that, you can purchase crypto assets in the application.
Learn the complete guide on how to buy Bitcoin (BTC) on Bittime.
Monitor price chart movements of Bitcoin (BTC), Ethereum (ETH) , Solana (SOL) and other cryptos to find out today's crypto market trends in real-time on Bittime.
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DISCLAIMER: This article is informational in nature and is not an offer or solicitation to sell or buy any crypto assets. Trading crypto assets is a high-risk activity. Crypto asset prices are volatile, where prices can change significantly from time to time and Bittime is not responsible for changes in fluctuations in crypto asset exchange rates.
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