Breaking: US Judge Approves FTX Bankruptcy Plans Paving Way For Repayment
Judge John Dorsey of the US Bankruptcy Court for the District of Delaware has finally approved the FTX Bankruptcy plan. This official approval comes about two years after the trading platform collapsed and John Ray III took over.
FTX Bankruptcy Plan Approved, What Next?
This approval is a positive news for members of the community whose funds got locked on the exchange. Considering the events of the past few weeks, many showed confidence that the FTX bankruptcy plans will be approved by the Court.
With this approval, a total of $6.6 billion will now be distributed to FTX creditors as confirmed in a creditors’ voting last week. The timeline for this distribution is slated to span 4 to 8 weeks from now. This voting plan scored massive support or 94% from creditors in the “dotcom customer entitlement claims.”
However, the plan did not fly without opposition as entities like Sunil Kavuri, an FTX Creditor representative, opposed the plans. His major concern hinges on the modalities of payment in the FTX bankruptcy plan. While Kavuri preferred crypto equivalent, the exchange has secured approval for a dollar payout.
With Judge John Dorsey ratifying the plan, 98% of FTX creditors will get back 118% of their funds in fiat. The total payoit may stretch up to $16 billion per the approved plans. Judge Dorsey highlighted in a statement that the FTX bankruptcy plan marked one of the most complex in related Chapter 11 proceedings.
Many investors and creditors are still reeling from the impact of the FTX collapse. The trading platform literally swallowed up to $8 billion of customers’ funds in alliance with Alameda Research. Under John Ray III, the defunct exchange launched a task force to recoup the mismanaged funds.
For the past 2 years, the firm sued rival exchanges like Bybit and recalled donated funds to charity made by Sam Bankman-Fried. The bankruptcy plan approved by Judge Dorsey marked the success of the effort thus far, ending anticipation for payout by FTX creditors.
What Next For FTX?
There are many unclear path forward for the trading platform. In the early days of the bankrupcy, John Ray III expressed hope in restarting the firm. With a quest to solicit investors launched at the time, in-house lawyer Andrew Dietderich stated that investors were not interested in backing the firm.
With a rather peaceful close to the bankruptcy, it remains unknown whether the management will revisit the FTX 2.0 plans.
In the meantime, FTX co-founder Sam Bankman-Fried has appealed his sentence as he believed he did not deserve the 25-year jail term. On the contrary, Former Alameda Research CEO Caroline Ellison took her 2-year sentencing in good faith, saying she was not “brave enough” to walk away from the exchange and SBF.
The post Breaking: US Judge Approves FTX Bankruptcy Plans Paving Way For Repayment appeared first on CoinGape.
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