Customers of the bankrupt crypto exchanges FTX and FTX.US may soon see a ray of light after a potential deal was struck between FTX creditors and debtors. On Tuesday, FTX debtors <a href="https://twitter.com/FTX_Official/status/1714077021075091900" rel="noopener noreferrer nofollow">declared a significant milestone in their Chapter 11 case</a>, indicating the possibility of resolving the ongoing consumer property conflicts.&nbsp;
<h2 id="b-the-customer-property-litigation-b">The Customer Property Litigation</h2>
The heart of the matter revolves around the customer property litigation that has been filed against the FTX Debtors. The dispute centers on whether customers of FTX.com and FTX US hold property interests in certain assets or if they are merely unsecured claimants, ranking equally with general creditors.&nbsp;
The Customer Shortfall Settlement seeks to put an end to this contentious issue by offering customers a claim against the FTX Debtors, albeit an unsecured one, with equitable priority to specific property assets held or acquired by the exchanges.
<h2 id="b-the-proposed-ftx-settlement-b">The Proposed FTX Settlement</h2>
Although the <a href="https://restructuring.ra.kroll.com/FTX/Home-DownloadPDF?id1=MjU3ODEyNg==&amp;id2=-1" rel="noopener noreferrer nofollow">proposed settlement was filed as a notice</a> with a Delaware-based U.S. bankruptcy court on October 16, the official filing seeking court approval is expected to be submitted by December 16.
This “shortfall claim” outlines FTX debtors’ estimate that customers of FTX.com and FTX.US will collectively receive 90% of the available assets for distribution. Specifically, the shortfall claim is estimated to be approximately $8.9 billion for FTX.com and $166 million for FTX.US. If approved by the bankruptcy court, these funds are anticipated to be disbursed to customers by the end of the second quarter of 2024.
The amended plan put forth by FTX involves dividing the available assets into three distinct pools. The pools consist of assets segregated for the benefit of FTX.com customers, U.S. customers, and a general pool of other assets.&nbsp;
<h2 id="b-challenges-and-uncertainties-remain-b">Challenges and Uncertainties Remain</h2>
Despite this proposed settlement, it’s essential to recognize that both sets of customers might not be paid in full, with FTX.com customers expected to face a higher percentage loss. Moreover, non-customers with claims against the General Pool may also incur greater percentage losses than either group of customers. The exact extent of these differences remains uncertain and will depend on various factors.
Notably, the backdrop against which this settlement unfolds includes the ongoing trial of Sam Bankman-Fried, the former CEO of FTX. <a href="https://thecoinrise.com/ftx-founder-sbf-unable-to-focus-on-trial-lawyers/" rel="noopener noreferrer nofollow">Bankman-Fried’s trial, now in its third week</a>, centers on matters related to his involvement in <a href="https://thecoinrise.com/ftx-bahamas-reportedly-files-for-chapter-15-bankruptcy-protection/" rel="noopener noreferrer nofollow">FTX’s collapse into bankruptcy in November 2022</a>. This trial adds a layer of complexity to the bankruptcy case, as the outcomes of legal proceedings may impact the terms and success of the proposed settlement.
The post <a rel="noopener noreferrer nofollow" href="https://thecoinrise.com/ftx-proposed-settlement-of-customer-property-disputes/">FTX Proposed Settlement of Customer Property Disputes</a> appeared first on <a rel="noopener noreferrer nofollow" href="https://thecoinrise.com">Latest News and Insights on Blockchain, Cryptocurrency, and Investing</a>.

FTX Proposed Settlement of Customer Property Disputes

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