Less than two years after the dramatic collapse of FTX, the United States Bankruptcy Court for the District of Delaware has confirmed the company’s Plan of Reorganisation (Plan).
FTX Plan of Reorganisation Approved By US Bankruptcy Court
FTX’s high-profile collapse in November 2022 sent shockwaves through the cryptocurrency industry. It resulted in the criminal conviction of FTX founder Sam Bankman-Fried, who was sentenced to 25 years in prison for fraud earlier this year. The United States Department of Justice states on its website that “Samuel Bankman-Fried orchestrated one of the largest financial frauds in history, stealing over $8 billion of his customers’ money.”
Since the collapse, a team of experts has been working to reconstruct FTX’s financial records and retrieve assets worldwide.
In a press release late on Monday, FTX said a significant majority (98%) of FTX creditors by number are expected to receive approximately 119% of their approved claims within 60 days of the effective date.
The payout is subject to standard know-your-customer (KYC) and other distribution procedures.
FTX anticipates the total available distribution pool to range between $14.7 billion and $16.5 billion. The company said the funds come from various sources, including assets held by the chapter 11 debtors, FTX Digital Markets (Bahamas), FTX Australia, the US Department of Justice, and private parties who have aided in recovery efforts.
John Ray III, CEO and Chief Restructuring Officer of FTX, said the court’s decision is “a significant milestone” on the road to repaying creditors and customers.
“Today’s achievement is only possible because of the experience and tireless work of the team of professionals supporting this case, who have recovered billions of dollars by rebuilding FTX’s books from the ground up and from there marshaling assets from around the globe,” said Ray. “It also reflects the strong collaboration we have had with governments and agencies from around the world that share our goal of mitigating the wrongdoings of the FTX insiders.”
Looking forward, FTX aims to return 100% of bankruptcy claims, with interest, to non-governmental creditors.
It is expected to be the largest and most complex asset distribution in bankruptcy history.
Ray explained that the estate is “working to finalize arrangements to make distributions to creditors across more than 200 jurisdictions around the world.”
