24/7 Cryptocurrency News

FTX Debtors to Return 90% of Distributable Value to Customers

FTX Debtors estimate customers will get over 90% global value with bankruptcy court approval by second quarter of 2024.
Published by
FTX Debtors to Return 90% of Distributable Value to Customers

In a filing on Monday, October 16, FTX Debtors announced the settlement of customer property disputes as part of its pending Chapter 11 cases. The customer shortfall settlement will be part of the Amended Plan of Reorganization, that FTX plans to file by December 2023.

Subject to approval by the Bankruptcy Court, the proposed amended plan anticipates customers globally receiving over 90% of the distributable value. This customer shortfall settlement aims to address the customer property dispute initiated against the FTX Debtors and support the confirmation of the amended plan by the second quarter of 2024.

The underlying customer property litigation contended that users of FTX.com and FTX US held property rights in specific assets, rather than an unsecured claim on par with general creditors. The Customer Shortfall Settlement resolves this dispute by granting customers an unsecured claim against the FTX Debtors with equitable priority over particular segregated or acquired assets.

As per @spreekaway, the Debtors propose a settlement option where you can reimburse 15% of your net withdrawals made within the past 9 days from the date of bankruptcy filing. If your net withdrawals during this period exceed $250,000, you can settle the 15% and they will refrain from pursuing legal action. However, if your net withdrawals in the last 9 days amount to less than $250,000, they will not pursue any legal action against you

Details of the FTX Amended Plan

The Amended Plan closely resembles the Draft Plan initially presented by the FTX Debtors for discussion on July 1, 2023. Under the provisions of the Amended Plan:

  1. The FTX Debtors would categorize the bulk of their assets into three distinct pools: assets set aside for the benefit of FTX.com customers, assets reserved for FTX US customers, and a “General Pool” containing other assets.
  2. Customers of FTX.com and FTX US would not only possess a claim against the assets held at their respective exchanges but also a “Shortfall Claim” against the General Pool. This Shortfall Claim aligns with the estimated value of assets that are absent from their respective exchanges.
  3. Further, the projected Shortfall Claim is estimated at roughly $8.9 billion for FTX.com and $166 million for FTX US.
  4. Also, 66% of the General Pool would be exclusively allocated for the settlement of Shortfall Claims. While the remaining 34% would go toward the settlement of any remaining Shortfall Claims and other claims on a proportional basis.

Customer Shortfall Settlement

The recent customer shortfall settlement by FTX comes after months of extensive negotiations by the FTX Debtors. They have also been talking to several stakeholders to come to a common ground. FTX’s new management under John. J. Ray III has been making major efforts toward customer settlements.

All this happens simultaneously with exposing SBF in the recent filing. The developments of the case highlight how SBF recklessly spent customer funds on celebrity promotions and deals. In his testimony on Monday, FTX’s former Head of Engineering, Nishad Singh, also confessed to committing crimes with Sam Bankman-Fried.

Advertisement

Share
Bhushan Akolkar

Bhushan is a seasoned crypto writer with over eight years of experience spanning more than 10,000 contributions across multiple platforms like CoinGape, CoinSpeaker, Bitcoinist, Crypto News Flash, and others. Being a Fintech enthusiast, he loves reporting across Crypto, Blockchain, DeFi, Global Macros with a keen understanding in financial markets. 

He is committed to continuous learning and stays motivated by sharing the knowledge he acquires. In his free time, Bhushan enjoys reading thriller fiction novels and occasionally explores his culinary skills. Bhushan has a bachelors degree in electronics engineering, however, his interest in finance and economics drives him to crypto and blockchain.

Published by
Why trust CoinGape: CoinGape has covered the cryptocurrency industry since 2017, aiming to provide informative insights to our readers. Our journalists and analysts bring years of experience in market analysis and blockchain technology to ensure factual accuracy and balanced reporting. By following our Editorial Policy, our writers verify every source, fact-check each story, rely on reputable sources, and attribute quotes and media correctly. We also follow a rigorous Review Methodology when evaluating exchanges and tools. From emerging blockchain projects and coin launches to industry events and technical developments, we cover all facets of the digital asset space with unwavering commitment to timely, relevant information.
Investment disclaimer: The content reflects the author’s personal views and current market conditions. Please conduct your own research before investing in cryptocurrencies, as neither the author nor the publication is responsible for any financial losses.
Ad Disclosure: This site may feature sponsored content and affiliate links. All advertisements are clearly labeled, and ad partners have no influence over our editorial content.

Recent Posts

  • 24/7 Cryptocurrency News

Solana Price Rallies 5% as Nasdaq-listed VisionSys Launches $2B SOL Treasury Strategy

Solana increased in price by 5% to approximately $219 following a $2 billion Solana treasury…

October 2, 2025
  • 24/7 Cryptocurrency News

XRP Ledger Rolls Out MPT Standard for Real-World Asset Tokenization

The XRP Ledger (XRPL) has launched the Multi-Purpose Token (MPT) standard, designed to simplify and…

October 1, 2025
  • 24/7 Cryptocurrency News

SEC Puts Crypto ETF Approvals On Hold Following U.S. Government Shutdown

The U.S. Securities and Exchange Commission has announced plans to streamline its operations amid the…

October 1, 2025
  • 24/7 Cryptocurrency News

Pi Network Adds DEX and AMM Features To Expand Pi Coin’s Utility

Pi Network has now added two new features to its Testnet. These are a decentralized…

October 1, 2025
  • 24/7 Cryptocurrency News

October Fed Rate Cut Odds Rise After Weak U.S. Labor Data, Bitcoin Surges

U.S. private payrolls unexpectedly fell in September, raising market bets that the Federal Reserve will…

October 1, 2025
  • 24/7 Cryptocurrency News

Hashdex Adds Cardano to Crypto Index Fund as ADA Gains SEC Listing Eligibility

Asset manager Hashdex has officially included Cardano in its Nasdaq Crypto Index U.S. ETF. This…

October 1, 2025