FTX Trading and its affiliated debtors today filed their anticipated amended plan of reorganization.
FTX exchange has shared a compensation plan for its customers and creditors. Though still pending bankruptcy court approval, execution of the plan could mean massive liquidity for the industry.
Also Read: Solana price dumps 21% on week as round three of FTX estate sale of SOL commences
FTX has filed a consensus-based plan for its reorganization, coming almost two years (nearly 17 months) after the now defunct FTX filed for Chapter 11 Bankruptcy Protection in the District of Delaware.
Thanking every stakeholder and expressing intention to “return 100% of bankruptcy claim amounts plus interest for non-governmental creditors,” John J. Ray III, Chief Executive Officer and Chief Restructuring Officer of FTX, said:
On behalf of FTX’s independent Board of Directors, I want to extend our deepest appreciation[ …]Finally, I want to thank all the customers and creditors of FTX for their patience throughout this process.
The plan has two key highlights for its customers and creditors:
The plan would resolve disputes with governmental and private stakeholders without costly and protracted litigation.
Subject to being finalized and approved by the Bankruptcy Court, the plan details how the exchange intends to distribute to customers and other creditors “virtually all of the assets associated with FTX at the time of its collapse in November 2022.” This means they will be compensated at 2022 crypto prices regardless of the price of the assets now.
In this contemplation, FTX is working with between $14.5 and $16.3 billion. This comprises totals of property collected valuation, converted to cash and available for. Specifically:
Bloomberg says FTX has amassed billions of dollars more than it needs to cover what customers lost in its November 2022 collapse. This positions the firm to receive full recoveries under the company’s bankruptcy.
Creditors receiving their payouts would be bullish for crypto in general, as it would signify a lot of liquidity in the market.
When FTX creditors receive their $ back
That’s gonna be one hell of a liquidity injection into the market eh
— CRG (@MacroCRG) May 7, 2024
In the immediate aftermath of this news, FTX token FTT rose by almost 2% to trade for $1.66 at the time of writing.
FTT/USDT 2-hour chart