FTX Reorganization Plan Nears Approval With 95% Creditor Support

Kelvin Munene Murithi
August 22, 2024
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CoinGape has covered the cryptocurrency industry since 2017, aiming to provide informative insights to our readers. Our journal 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.
Breaking: US Judge Approves FTX Bankruptcy Plans Paving Way For Repayment

Highlights

  • Over 95% of FTX creditors back reorganization, representing 99% of claim value.
  • FTX reorganization aims to distribute up to $16.3B in recovered assets.
  • FTX's Plan promises 100% claim repayment plus interest to non-governmental creditors.

Bankrupt crypto exchange FTX and related debtors have indicated their preliminary agreement to the reorganization plan submitted to the US Bankruptcy Court for the District of Delaware.

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FTX Reorganization Plan Nears Approval

According to a recent press release, the bankrupt crypto exchange and its affiliated debtors said they have received substantial backing for the amended Plan of Reorganization submitted to the United States Bankruptcy Court for the District of Delaware. Based on unofficial voting updates, over 95% of the creditors who voted for the Plan have voted in the affirmative.

These votes represent 99% of the claims by value, thus showing the general agreement among all the creditors, including those linked to FTX U.S. and Dotcom.

John J. Ray III, the CEO and Chief Restructuring Officer of FTX, expressed his appreciation for this high voting turnout, arguing that it showcases support for the reorganization plan.

The Plan offers the possibility of repaying 100% of the amounts of the bankruptcy claims and interest to the non-governmental creditors. It also seeks to address various contentious issues with both governmental and private counterparts, which would help avoid lengthy and costly legal battles and expedite the process of paying back creditors.

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Asset Recovery and Distribution

The reorganization plan provides for the distribution of almost all the assets related to the bankrupt crypto exchange, regardless of their location at the time of the company’s bankruptcy in November 2022. According to bankrupt crypto exchange, the total value of property that will be collected, converted to cash, and distributed will be between $14.5 billion and $16.3 billion. 

This recovery involves the assets owned by the firm’s Chapter 11 debtors and assets administered by various entities, such as the Joint Official Liquidators of FTX Digital Markets Ltd (Bahamas) and the Securities Commission of The Bahamas. It was mainly driven by the realization of the value of the various assets owned by Alameda Research and FTX Ventures.

In addition, the reorganization plan also provides for payment of interest to the primary classes of customers and creditors at a rate of up to 9% from the commencement of the Chapter 11 cases until the date of distribution. However, the confirmation hearing for the reorganization plan is set to commence on October 7, 2024, when the final vote counts will be announced.

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Recovery Steps Taken

In addition to the ongoing restructuring processes, FTX has struggled with numerous legal issues, including lawsuits against its former executives.

Some of these are the imprisonment of the former CEO, Sam Bankman-Fried for 25 years and the order to pay a fine of $11 billion for financial fraud.

Similarly, the embattled crypto exchange and its affiliate, Alameda Research, have also reached a settlement with the CFTC, which will require them to pay back $12.7 billion to the creditors.

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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.
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Why Trust CoinGape

CoinGape has covered the cryptocurrency industry since 2017, aiming to provide informative insights Read more…to our readers. Our journal 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.

About Author
About Author
Kelvin Munene is a crypto and finance journalist with over 5 years of experience, offering in-depth market analysis and expert commentary . With a Bachelor's degree in Journalism and Actuarial Science from Mount Kenya University, Kelvin is known for his meticulous research and strong writing skills, particularly in cryptocurrency, blockchain, and financial markets. His work has been featured across top industry publications such as Coingape, Cryptobasic, MetaNews, Cryptotimes, Coinedition, TheCoinrepublic, Cryptotale, and Analytics Insight among others, where he consistently provides timely updates and insightful content. Kelvin’s focus lies in uncovering emerging trends in the crypto space, delivering factual and data-driven analyses that help readers make informed decisions. His expertise extends across market cycles, technological innovations, and regulatory shifts that shape the crypto landscape. Beyond his professional achievements, Kelvin has a passion for chess, traveling, and exploring new adventures.
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.