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 Customers of the bankrupted cryptocurrency exchanges FTX and FTX.US may recover over 90% of their trapped assets under a proposed bankruptcy settlement announced on October 17, 2023.
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This settlement deal between FTX and its creditors outlines a plan that could potentially return almost all of its available funds to retail users who had deposits on the two exchanges when they filed for bankruptcy in November 2023.&nbsp;
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 The Plan Term Sheet is a compromise between the Committee, the Debtors, the ad hoc customer committee and other representatives on a range of issues that balance the rights of customer and non-customer creditors across the U.S. and foreign debtors.
 — Official Committee of Unsecured Creditors of FTX (@FTX_Committee) <a href="https://twitter.com/FTX_Committee/status/1714093183058014393?ref_src=twsrc%5Etfw" rel="noopener noreferrer nofollow">October 17, 2023</a>
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The agreement establishes a shortfall claim value of approximately $8.9 billion for FTX.com users and $166 million for FTX US users. This impressive 90% return would come from segregated asset pools allocated to each group of customers.
Under the proposed terms, FTX would reduce claims above $250,000 withdrawn in the 9 days before bankruptcy by 15%. Insiders, affiliates, and those associated with fund misuse could also potentially be excluded from settlements. FTX’s stated objective with this deal is to make victims whole while avoiding payouts to potential bad actors.
Both FTX and its creditors has expressed enthusiasm over this new settlement agreement. FTX CEO John Ray has praised this deal, stating: “Together, starting in the most challenging financial disaster I have seen, the debtors and their creditors have created enormous value from a situation that easily could have been a near-total loss for customers.”
FTX’s creditors also described this agreement as a “major milestone” in resolving disputes over <a href="https://restructuring.ra.kroll.com/FTX/Home-DownloadPDF?id1=MjU3ODEyNg==&amp;id2=-1" rel="noopener noreferrer nofollow">customer property claims</a> in the Chapter 11 case. Earlier, <a href="https://defi-planet.com/2023/08/ftx-moves-to-exclude-its-dubai-unit-from-bankruptcy-proceedings-as-creditors-express-discontent-over-restructuring-plan/" rel="noopener noreferrer nofollow">FTX’s creditors had expressed dissatisfaction with the exchange’s initial bankruptcy plan</a>. In their court filing on July 31, 2023, the Official Committee of Unsecured Creditors (UCC) noted that despite repeated requests and prior assurances, the FTX restructuring team had not engaged in any calls or meetings to discuss the draft Chapter 11 plan.
While it still needs court approval, this plan could lead to disbursements being finalized by mid-2024.
If approved, this plan could expedite the return of billions in deposits that have been frozen since <a href="https://defi-planet.com/2022/12/what-happened-to-ftx-the-anatomy-of-an-implosion/" rel="noopener noreferrer nofollow">FTX’s collapse,</a> potentially preventing lengthy delays in ongoing bankruptcy proceedings.
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The post <a rel="noopener noreferrer nofollow" href="https://defi-planet.com/2023/10/ftx-customers-may-recover-90-of-funds-by-mid-2024-in-settlement-deal/">FTX Customers May Recover 90% of Funds by Mid 2024 in Settlement Deal</a> appeared first on <a rel="noopener noreferrer nofollow" href="https://defi-planet.com">DeFi Planet</a>.

FTX Customers May Recover 90% of Funds by Mid 2024 in Settlement Deal

DeFi Planet

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