US court approves FTX compensation plan
During a hearing yesterday before the U.S. Bankruptcy Court in Delaware, Judge Dorsey approved the FTX compensation plan.
During a hearing yesterday before the U.S. Bankruptcy Court in Delaware, Judge Dorsey approved the FTX compensation plan. As a result, 98 percent of users could receive about 119 percent of their claimed account value back.
This court decision comes about two years after the crypto exchange's first bankruptcy filing in November 2022, which led to both criminal charges and civil lawsuits.
“Looking ahead, we are able to collect 100 percent of the bankruptcy claims plus interest for non-government creditors through the largest and most complex distribution of the estate in history,” said FTX CEO and Head of Restructuring John J. Ray III.
FTX creditors would receive their payments within 60 days of the plan's effectiveness. The total compensation amount is expected to be between $14.7 billion and $16.5 billion.
Critics of the restructuring plan stressed that creditors should be compensated for the assets in their FTX portfolios, but that there would be insufficient consideration of symbolic gains between November 2022 and 2024.
The billions of dollars paid out to crypto users could affect the market in the same way Mt. Gox payouts did in July 2024. Because the payout will be in cash, many observers believe this time there will be a positive impact.
