FTX Creditors Set to Receive 118% Cash Payout

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Those payments would flow from a pool of assets that FTX’s lawyers have pulled together in the 17 months since the exchange collapsed, the lawyers said. They tapped a wide range of sources, including digital currencies that FTX still owned when it filed for bankruptcy and company assets like shares in start-ups, which could be sold to bidders.

The amount that FTX recovered is “in general pretty unheard of,” said Yesha Yadav, a law professor at Vanderbilt University. “That’s something that is really quite astonishing for a major bankruptcy.”

The plan comes with a caveat. The amount owed to customers was based on the value of their holdings at the time of FTX’s bankruptcy in November 2022. That means customers won’t reap the benefits of a recent surge in the crypto market that sent the price of Bitcoin to a record high. A customer who lost one Bitcoin when FTX imploded, for example, would be entitled to less than $20,000, even though a Bitcoin is now worth more than $60,000.

It will take months for the payouts to begin. The plan requires approval by the federal judge overseeing FTX’s bankruptcy, John T. Dorsey. If creditors raise any objections to the plan, that could extend the timeline.

This article was originally published by a www.fxempire.com

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