A Delaware bankruptcy judge has accepted a reorganization plan for the troubled exchange FTX. This is a big deal for the cryptocurrency industry. The court made this ruling on October 7. It is an important step toward paying users almost two years after the exchange went down in November 2022.
The accepted plan aims to pay back 98% of FTX’s creditors about 119% of what it said its account was worth. People who were harmed can expect to get back more than they lost. The total amount they will get is expected to be between $14.7 billion and $16.5 billion. FTX’s CEO and chief restructuring officer, John J. Ray III, was positive about the process and pointed out that it could be the most difficult bankruptcy estate release in history.
But not all creditors are happy with how things turned out. Some critics say the plan doesn’t take into account how much cryptocurrencies have grown in value since FTX filed for bankruptcy. For instance, the price of Bitcoin has gone up a lot, which makes creditors worry that they might only get back a small part of what they could have made. Someone who was at the bankruptcy meeting said that users might only get 10% to 25% of the value of their crypto back.
As a result of the FTX scandal, several top execs have been sentenced for their parts in bringing down the exchange. Former Alameda Research CEO Caroline Ellison got two years in prison after being found guilty of theft, and former CEO Sam Bankman-Fried got 25 years in jail.
Creditors have hope because of the judge’s ruling, but it’s still not clear when they will be paid back. The way the money is distributed could have the same effect as previous crashes, like Mt. Gox. This makes people worry about how the market will change.
After this approval, everyone in the coin world will be keeping a close eye on FTX as it gets ready to start the complicated process of paying back its debts.
