FTX repays approximately 119% of invoices to 98% of users Distribution will be made to creditors in over 200 jurisdictions FTX will go bankrupt in November 2022 following allegations of fraud and irregularities in managing customer funds
A U.S. judge has approved FTX's bankruptcy plan, which will use billions of dollars in recovered assets to pay back users, nearly two years after the cryptocurrency exchange's collapse.
On Monday, Judge John Dorsey of the U.S. Bankruptcy Court for Delaware approved FTX's plan. This will allow the exchange's debtors to repay approximately 119% of their claims for 98% of its users as of November 2022, when the company filed for bankruptcy.
FTX expects repayments to be between $14.7 billion and $16.5 billion after the total amount of real estate is collected and converted into cash.
John J. Ray III, FTX CEO and chief restructuring officer, said in a statement: “The court's approval of our plan is a significant step forward for our company to distribute cash to customers and creditors. This is an important milestone on our journey,” he said, adding:
“The Foundation is working on final arrangements for distribution to creditors across more than 200 jurisdictions around the world.”
Before its collapse, FTX was a well-known and trusted platform in the cryptocurrency space. However, in November 2022, the exchange collapsed due to lack of liquidity and mismanagement of funds, ultimately leading to concerned investors withdrawing large amounts of funds.
FTX co-founder and CEO Sam Bankman Fried was later arrested and sentenced to 25 years in prison for fraud and mismanagement of the exchange. Former Alameda Research CEO Caroline Ellison pleaded guilty to charges related to her role in the collapse of FTX and was sentenced to 24 months in prison.
