FTX has submitted a proposal to a bankruptcy court outlining a plan to refund creditors who held cryptocurrency at the troubled exchange.
The majority of customers are slated to receive their funds back with interest, although both creditors and debtors missed out on substantial gains in the crypto market following FTX’s dramatic collapse in November 2022, during which the price of Bitcoin soared more than threefold.
FTX intends to fully repay non-governmental creditors based on the value of their claims as determined by the bankruptcy court. This means that 98 percent of creditors, those with claims of up to $50,000, will receive 118 percent of the amount of their allowed claims.
Other creditors will be repaid their funds along with what FTX describes as billions of dollars in compensation for the time value of their investments.
Government creditors are in line for payouts with a nine percent interest rate, with the Internal Revenue Service and Department of Justice among the stakeholders with whom FTX has reached settlements.
The company suggests that if its reorganization plan is approved, it would be able to settle disputes with private and government stakeholders “without costly and protracted litigation.”
Overall, FTX anticipates being able to distribute between $14.5 billion and $16.3 billion in cash.
FTX stated that it was able to monetize an exceptionally diverse array of assets, most of which were proprietary investments held by the Alameda or FTX Ventures businesses, or litigation claims.
Assets tracked down by FTX CEO John J. Ray III and his team reportedly included around $8 billion in real estate, political donations, and venture capital investments.
The company filed the updated reorganization plan just weeks after co-founder and former CEO Sam Bankman-Fried was sentenced to 25 years in prison. Bankman-Fried was found guilty in November on charges including wire fraud and conspiracy to commit money laundering.
