FTX Unveils Billions Repayment Plan to Compensate Creditors

A
repayment
plan
has
been
disclosed
by
FTX,
the
digital
asset
exchange
that
has
gone
bankrupt,
in
order
to
recompense
its
creditors
for
the
damages
they
have
sustained.
Repaying
all
claims
and
providing
extra
compensation
for
the
time
value
of
investments
are
the
goals
of
the
plan,
which
is
contingent
upon
the
permission
of
the
United
States
Bankruptcy
Court
for
the
District
of
Delaware
to
be
implemented.

The
Strategy
for
Repayment

The
strategy
that
is
being
presented
contains
a
recovery
percentage
of
118%
for
creditors
whose
claims
are
less
than
$50,000,
which
is
equivalent
to
98%
of
FTX’s
creditors
regarding
the
number
of
claims.

In
addition,
creditors
who
have
claims
that
are
more
than
fifty
thousand
dollars
will
be
given
full
payback
as
well
as
extra
compensation
for
the
time
value
of
their
investments.

According
to
the
proposal,
it
is
projected
that
the
entire
payout
will
be
somewhere
between
$14.5
billion
and
$16.3
billion.

Following
the
adoption
of
the
proposal,
it
is
anticipated
that
payments
would
go
into
effect
within
sixty
days.

Valuation
is
the
Subject
of
Controversy

According
to
some
who
are
opposed
to
the
idea,
the
repayment
of
creditors
based
on
the
value
of
assets
at
the
time
of
FTX’s
bankruptcy
in
November
2022
could
not
accurately
represent
the
potential
that
their
investments
have
at
the
present
moment.

In
the
time
after
the
crash,
the
cryptocurrency
market
has
been
subject
to
enormous
volatility,
with
Bitcoin
seeing
a
rise
of
roughly
280%.

Concerns
have
been
raised
by
a
number
of
creditors,
including
Mike
Belshe,
the
Chief
Executive
Officer
of
BitGo,
who
believes
that
the
repayment
plan
does
not
take
into
account
the
true
worth
of
assets.

Efforts
to
Recover

Since
the
collapse
of
FTX
in
2022,
the
company
has
been
working
through
a
difficult
process
of
rehabilitation.

An
$8
billion
shortfall
was
identified
by
the
exchange,
which
prompted
a
number
of
different
financial
manoeuvres
to
be
taken
in
order
to
reduce
losses.

The
fact
that
FTX
has
declared
that
it
will
not
be
relaunching
its
cryptocurrency
exchange
activities
is
indicative
of
a
strategic
shift
from
the
business
model
that
it
had
previously
used.

Mysterious  Transfers

The
two
wallets
that
are
connected
to
FTX
and
its
sister
company,
Alameda
Research,
were
responsible
for
initiating
significant
cryptocurrency
transactions
that
totaled
$8.3
million.
This
occurred
just
before
a
vital
deadline.

In
the
cryptocurrency
world,
these
transactions
have
caused
suspicions
to
be
raised
since
the
purpose
of
these
transfers
has
not
been
revealed.

The
transactions
took
place
one
day
before
to
the
day
when
FTX
debtors
were
supposed
to
submit
an
altered
version
of
their “Plan
and
Disclosure
Statement”.

Image
source:
Shutterstock

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