FTX files plan to end bankruptcy and repay cryptocurrency creditors billions

18.12.2023

FTX Trading Ltd. unveiled its latest proposal to repay billions of dollars to customers and creditors, kicking off the latest round of potential wrangling over how best to end the fraud-plagued cryptocurrency company’s bankruptcy case.

The reorganization plan left some of the most important questions unanswered, including whether FTX would restart its dormant cryptocurrency exchange, how the company would value certain digital tokens and how much creditors could expect to receive.

The plan will be sent to creditors next year for a vote – likely with key details added – before it goes to U.S. Bankruptcy Judge John Dorsey for final approval. The major creditor and client groups involved in the Chapter 11 case agreed to the general provisions of the plan.

The payment plan calls for the distribution of billions of dollars in cash after most of the company’s cryptocurrency holdings are liquidated.

Last month, FTX founder Sam Bankman-Fried was found guilty of orchestrating a massive fraud that led to the collapse of his FTX exchange.

The company filed for bankruptcy last year after Bankman-Fried agreed to hand over control of his empire to restructuring specialists. Since then, advisors have been scrambling for assets and trying to untangle a complex web of debts owed to various creditors, including clients who had deposited cash and cryptocurrencies on the trading platform.