Bitcoin

FTX’s newest proposal to pay victims back over its 2022 collapse now promises to repay all creditor claims plus “billions in compensation for the time value of their investments” — though some pundits argue it may not be enough.
In a May 7 <a href="https://www.prnewswire.com/news-releases/ftx-files-consensus-based-plan-of-reorganization-302138948.html?tc=eml_cleartimeand" target="_blank" rel="noopener nofollow">statement</a>, the bankrupt crypto exchange said the plan&nbsp;was “subject to being finalized and approved” by the United States Bankruptcy Court for the District of Delaware.
Only creditors holding claims in an allowed amount below $50,000 will be eligible for the 118% recovery, which FTX anticipated was “98% of the creditors of FTX by number.”
FTX’s plan, however, still reimburses creditors for the value of their assets <a href="https://cointelegraph.com/news/ftx-creditors-in-kind-crypto-repayments-low-prices">at the time of its bankruptcy</a> in November 2022 rather than at current prices, which some creditors have been arguing for.
Since that date, the crypto markets have seen a resurgence, with Bitcoin (<a href="https://cointelegraph.com/bitcoin-price">BTC</a>) rising by nearly 280%.&nbsp;
“We are pleased to be in a position to propose a Chapter 11 plan that contemplates the return of 100% of bankruptcy claim amounts plus interest for non-governmental creditors,” said FTX CEO and chief restructuring officer John J. Ray III. 
FTX estimated the total value that will be distributed to creditors will range between $14.5 and $16.3 billion.
<figure data-ct-non-breakable="true">
 <img src="https://s3.cointelegraph.com/uploads/2024-05/20b4ef27-419b-4f13-912a-a2efd9225e54.jpg" alt="" title="">
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 Figures from FTX’s amended reimbursement plan. Source: FTX
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The proposed repayment would occur within 60 days after the plan’s effective date.
However, some industry pundits have expressed dissatisfaction with the proposal, as its creditors aren’t set to recover their stolen funds in an amount equivalent to current market prices.
“I understand why the bankruptcy process needs to work this way but let’s not pretend victims are getting their money back,” Mike Belshe, the CEO of BitGo,&nbsp;<a href="https://x.com/mikebelshe/status/1788026467034784119" target="_blank" rel="noopener nofollow">posted</a> to X on May 8.
Related: <a href="https://cointelegraph.com/news/ftx-voyager-bankruptcy-settlement">Bankruptcy judge signs off on $450M FTX-Voyager settlement</a>
The $32 billion cryptocurrency exchange <a href="https://cointelegraph.com/news/breaking-down-ftx-s-bankruptcy-how-it-differs-from-other-chapter-11-cases">collapsed in November 2022</a>,&nbsp;revealing a $8 billion hole that its new management has been trying to recover in the years following.
Among those efforts include a <a href="https://cointelegraph.com/news/ftx-to-offload-1-billion-ai-artificial-intelligence-sam-bankman-fried-anthropic-stake-bankruptcy-debts">$884 million sale</a> of shares in artificial intelligence firm Anthropic in March, which accounted for a majority of FTX’s stake in the firm.
FTX confirmed in January that its restructuring plans <a href="https://cointelegraph.com/news/ftx-repay-creditors-not-restart-exchange">will not include a reboot</a> of the cryptocurrency exchange, which was among the largest platforms by trading volume prior to its collapse. 
Magazine: <a href="https://cointelegraph.com/magazine/deposit-risk-crypto-exchanges-money/">Deposit risk: What do crypto exchanges really do with your money?</a>
Update (May 8, 3:23 am UTC): A previous version of this article incorrectly stated that the FTX claims were no longer calculated at November 2022 prices. Added a section which includes industry criticism over the newly proposed plan.

FTX proposes ‘billions in compensation,’ but not everyone’s happy

Cointelegraph

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