FTX’s creditors have released a liquidation plan that aims to repay clients in cash within a few months. The attorney representing FTX outlined the stages leading up to this point. The bankrupt cryptocurrency exchange has requested a US court to allow creditors to vote on the best liquidation plan, and the judge has granted their request. Despite earlier objections, the judge approved the voting plan documents and overruled the creditors who were opposed to it.
The liquidation plan put forward by FTX’s creditors intends to repay clients in cash within a few months. The bankruptcy judge, John Dorsey, has given his approval to the plan. The stages leading up to this point were outlined by Andy Dietderich, an attorney representing FTX, who described it as a massive team effort. The insolvent company has liquidated its holdings in real estate, venture capital, and other IT companies.
Furthermore, the firm has managed to recoup around $16 billion to settle its debts after its demise and bankruptcy, including $12 billion in cash with intentions to pay clients with interest. Some creditors have argued that the claim of “full recovery” was unjust because it was far lower than the existing values.
FTX’s collapse in November 2022 resulted in massive losses in the market, as it was the second-largest crypto exchange at the time. This had a domino effect on crypto regulation and market sentiment due to the billions of dollars in losses.
Many FTX creditors have challenged the idea, pointing to the disparity in cryptocurrency prices between 2022 and the present as the reason. They claim that creditors will get less than market value since it is not a complete recovery.
