Billion

Former FTX customers registered a victory as the long-defunct crypto exchange has received approval for its $16.5 billion bankruptcy plan from the court. That choice opens the door for creditors to receive some of the money they lost in the form of reimbursement, with interest — a major move in an effort to put one of crypto’s biggest failures behind it. 
<h2 id="strong-prioritizing-customer-reimbursements-strong">Prioritizing Customer Reimbursements</h2> 
<a href="https://cryptoslate.com/court-greenlights-ftxs-16-5-billion-bankruptcy-plan-to-repay-defrauded-customers/" rel="nofollow noopener" target="_blank">FTX</a>, a Luxembourg-based futures exchange company that filed for bankruptcy protection in August under Chapter 11 of the US Bankruptcy Code, received approval from U.S. Bankruptcy Judge John Dorsey on October 7 to implement its approved customer-first bankruptcy plan. A judge has signed off on a plan that allows returning customers to be repaid before government regulators and other creditors. The announcement will impact the millions of users in FTX’s international customer base who were perturbed at the embattled exchange’s fall from grace, having been taken down by its malfeasant founder, Sam Bankman-Fried, last year. 
<img decoding="async" class="aligncenter wp-image-48967 size-full" src="https://thebitjournal.b-cdn.net/wp-content/uploads/2024/10/DALL·E-2024-10-08-12.35.01-A-visually-striking-scene-depicting-a-large-scale-courtroom-setting-with-lawyers-and-judges-deliberating-on-a-major-financial-case-with-symbolic-repr.webp" alt="Court Approves FTX’s $16.5 Billion Repayment Plan, But Will It Be Enough?" width="1792" height="1024" title="Court Approves FTX’s $16.5 Billion Repayment Plan, But Will It Be Enough? 5"> 
The recovery effort, which had been set to recover between $14.7bn and $16.5bn worth of assets, will now ensure that 98% of customers receive at least 119% of the value they held in their accounts as of November 2022. However, it will turn out to be cash this time and not the original cryptocurrency, which is being followed by the exchange founders for wrongful use of funds. 
<h2 id="strong-timeline-and-breakdown-of-repayments-strong">Timeline and Breakdown of Repayments</h2> 
In the approved plan, repayments will start up to 60 days after the plan takes effect, at last offering some relief to the exchange’s erstwhile customers. The vast majority of the initial payouts—$1.1bn or so—will go to creditors who have claims for less than $50,000. More than 27,000 smaller claimants will have their funds repaid by the end of 2024, with larger claims queued for processing during the first and second quarter of 2025. 
Interestingly, FTX’s recovery efforts were bolstered by several asset sales, including stakes in companies such as AI startup Anthropic. These sales contributed to the sizable recovery, allowing FTX to negotiate settlements with a variety of stakeholders, including customers, government entities, and international liquidators. 
<h2 id="strong-cash-repayments-with-interest-strong">Cash Repayments with Interest</h2> 
The payment will include interest, providing more relief to customers who have been waiting almost two years for compensation. A total of $16.5 billion is expected to be recovered, but it may fall by a small amount after converting some assets into cash. One thing worth mentioning about this scheme is it only involves cash bonuses since FTX embezzled the original crypto payments, so we wouldn’t be able to receive crypto in return if there’s ever an exchange with Butina. 
Recovering these proceeds from the fraudulent firm was powered only by our team’s determination to detect and rebuild every item contained in the Company’s financial records, John J. Ray III, CEO emphasized. His comments highlight just how important this judgement is, not only for the traders but also the broader crypto world after being roiled by FTX’s collapse. 
<h2 id="strong-a-milestone-for-ftx-creditors-and-the-crypto-industry-strong">A Milestone for FTX Creditors and the Crypto Industry</h2> 
The approval puts an official end to one of the cryptocurrency world’s most notorious fraud cases. The chapter finally closes on the FTX saga as creditors and customers will now get a chance to receive their funds. This is one of the few times Chapter 11 bankruptcy plans line up with customers, and even preferred shareholders will get something. It is a rare event, because in most instances shareholders lose everything. 
Yet not all stakeholders are happy though that the court has approved it suggests progress. Others have argued that returning the recovered assets in cash rather than their equivalent denomination of the original encrypted currencies is to rob them of a potential hike in crypto prices during the recovery process. 
<img decoding="async" class="aligncenter wp-image-48968 size-full" src="https://thebitjournal.b-cdn.net/wp-content/uploads/2024/10/DALL·E-2024-10-08-12.35.09-An-intense-courtroom-scene-with-cryptocurrency-symbols-like-Bitcoin-and-Ethereum-hovering-above-the-courtroom-tables.-Lawyers-and-judges-are-present-.webp" alt="Court Approves FTX’s $16.5 Billion Repayment Plan, But Will It Be Enough?" width="1792" height="1024" title="Court Approves FTX’s $16.5 Billion Repayment Plan, But Will It Be Enough? 6"> 
<h2 data-pm-slice="1 1 []" id="strong-the-final-word-strong">The Final Word</h2> 
The FTX court-approved bankruptcy plan provides a ray of hope to customers and creditors as it seeks to return billions in recovered assets in the next few months. The collapse may have been a catastrophic one for the exchange, but thankfully for the customers that were affected in some way, following the imprisonment of its founder Mark Karpeles and subsequent recovery efforts by a dedicated team, things might just have turned out ok after all. As some require repayment, this serves as a warning and potential model for what is to come in crypto-related bankruptcies. 
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Court Approves FTX’s $16.5 Billion Repayment Plan, But Will It Be Enough?

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