FTX reached a major milestone in its bankruptcy proceedings as the United States Bankruptcy Court for the District of Delaware formally approved the company’s restructuring plan.
This comes nearly two years after the cryptocurrency exchange’s historic collapse in November 2022.
FTX Bankruptcy Restructuring Plan Approved
The plan, which has received strong support from creditors, is expected to repay an average of 119% of the value of claims, with some creditors receiving as much as 140% in cash. Approximately 98% of FTX’s creditors, by volume, will receive their repayments within 60 days of the plan going into effect.
According to the official announcement, FTX estimates that the total amount of assets recovered will be between $14.7 billion and $16.5 billion, thanks to assets recovered from various entities, including the U.S. Department of Justice and international regulators.
Commenting on the progress, John J. Ray III, CEO and Chief Restructuring Officer of FTX, said:
“Today’s achievement was only possible due to the experience and tireless efforts of the team of experts supporting this case, who have recovered billions of dollars by rebuilding FTX’s books from scratch and collecting assets from around the world. It also demonstrates the strong collaboration we have had with governments and agencies around the world who share our goal of minimizing the wrongdoings of FTX’s insiders.”
Ray III, who took over after former CEO Sam Bankman-Fried, also said that FTX’s assets are on track to repay 100% of the bankruptcy claims, with interest, to non-government creditors. He called it the “largest and most complex” bankruptcy distribution in history.
He added that FTX’s assets are in the process of finalizing agreements to distribute funds to creditors in more than 200 jurisdictions globally.
To ensure this goes smoothly, dedicated agents have been hired to ensure the recovery of assets is carried out safely and in a timely manner for customers around the world.
Events following FTX’s collapse in 2022
FTX filed for bankruptcy in late 2022 after the exchange collapsed. In November 2023, Sam Bankman-Fried was convicted of seven criminal charges, including wire fraud and conspiracy, and sentenced to nearly 25 years in prison. In May, the company’s co-CEO, Ryan Salame, was sentenced to 90 months in prison. Most recently, Caroline Ellison, CEO of FTX-affiliated company Alameda, was sentenced to two years in prison for her role in the company’s collapse. Two former FTX executives, Gary Wang and Nishad Singh, are awaiting sentencing. Singh is scheduled to be sentenced later this month, while Wang will be sentenced in late November.
