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The FTX reorganization plans are going on in full swing and the team is now planning to soon end the bankruptcy. Reportedly, the team is engaging in the final round of discussions regarding the payment of billion of dollars of funds to affected customers and creditors.
FTX Reorganization Plan
In a significant development, FTX Trading Ltd. has revealed its latest proposal, outlining plans to return billions of dollars to customers and creditors. This move initiates the final phase of discussions regarding the resolution of the bankruptcy case surrounding the crypto firm, which has been marred by fraud-related issues.
However, several critical questions remain unanswered within the reorganization plan, raising uncertainties about the potential revival of FTX’s defunct crypto exchange, the valuation methodology for certain digital tokens, and the expected returns for creditors.
Scheduled for creditor voting in the coming year, the plan is expected to undergo further refinement, with additional key details likely to be incorporated. The ultimate approval will be sought from US Bankruptcy Judge John Dorsey following the creditor vote. Notably, major creditor and customer groups involved in the Chapter 11 case have reached a consensus on the general outlines of the plan.
The proposed payout strategy is designed to distribute billions of dollars in cash, contingent on the liquidation of a substantial portion of the firm’s cryptocurrencies. The unfolding developments in the bankruptcy case will undoubtedly be closely monitored by stakeholders and the broader cryptocurrency community.
As reported last month, FTX has also been eyeing bidders for the exchange. FTX Trading Ltd., formerly a crypto exchange leader, is exploring post-bankruptcy strategies. Investment banker Kevin M. Cofsky revealed ongoing talks with potential investors and various options, including selling the entire exchange or forming partnerships.
SBF Convicted of Fraud
Last month, FTX founder Sam Bankman-Fried was found guilty of masterminding a significant fraud scheme, resulting in the downfall of the FTX exchange. The company initiated bankruptcy proceedings last year when Bankman-Fried relinquished control of his business to restructuring experts.
Subsequently, these advisers have been actively engaged in identifying assets and navigating a convoluted network of debts owed to diverse creditors, encompassing customers who had funds, both in cash and cryptocurrency, on the trading platform.
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