FTX, the once third-largest cryptocurrency exchange in the world, has announced that nearly all of its customers will be reimbursed for the funds they are owed, following the exchange's collapse two years ago. In a recent court filing, FTX revealed that it owes approximately $11.2 billion to its creditors, while estimating that it has between $14.5 billion and $16.3 billion available for distribution.
The repayment plan outlined by FTX includes not only full payment of claims but also supplemental interest payments at a rate of 9% for most creditors. Customers and creditors with claims of $50,000 or less are set to receive about 118% of their claim, covering around 98% of FTX's customer base.
FTX attributed its ability to recover funds to the monetization of assets, primarily consisting of proprietary investments from Alameda or FTX Ventures businesses, as well as litigation claims. The exchange filed for bankruptcy protection in November 2022 after facing a crisis akin to a bank run, leading to the resignation of CEO and founder Sam Bankman-Fried.
Following Bankman-Fried's departure, John Ray III, a seasoned bankruptcy litigator known for his work post-Enron collapse, was appointed as the new CEO of FTX. Ray expressed satisfaction with the proposed chapter 11 plan, which aims to return 100% of bankruptcy claim amounts plus interest to non-governmental creditors.
Despite the positive news for creditors, investors at FTX have faced significant losses due to the surge in cryptocurrency prices during the past two years. Bitcoin, for instance, has seen a 290% increase in value, with a single coin now selling for close to $62,675 compared to $16,080 when FTX filed for bankruptcy.
The bankruptcy court is scheduled to review the proposed plan on June 25, marking a significant step towards resolving the aftermath of FTX's collapse and providing some relief to affected parties.
