• Home
  • Latest News
  • FTX's Proposal: 90% Customer Fund Return with Conditions

FTX's Proposal: 90% Customer Fund Return with Conditions

Latest News
HANZO
Oct 19, 2023 at 09:44 am

In a renewed dedication to restitution, the FTX Debtors have unveiled a revised proposal with the aim of reimbursing up to 90% of the assets owed to creditors, which were held within the exchange prior to its collapse in November of the previous year.

This group of debtors, currently overseeing the bankruptcy proceedings, intends to formally present this plan for scrutiny to a U.S. Bankruptcy Court no later than December 16, 2023.

FTX's decline unfolded following the disclosure of revelations by Bitsday regarding the state of its financial holdings. The recently appointed CEO, John J. Ray III, has expressed strong discontent with the financial management practices within the company. Meanwhile, the founder, Sam Bankman-Fried, is presently entangled in legal proceedings involving criminal charges.

As outlined in the proposal, the missing customer assets will be categorized into three distinct pools, based on the circumstances prevailing at the commencement of the Chapter 11 proceedings: Assets designated for FTX.com customers, assets allocated for FTX.US customers, and a "General Pool" encompassing miscellaneous assets.

Customers with a preferred settlement amount below $250,000 have the option to accept the settlement without any reduction in their claim or payment. This preferred settlement corresponds to 15% of customer withdrawals made on the exchange nine days before its cessation of operations.

Additionally, creditors will be entitled to a "Shortfall Claim" against the general pool, commensurate with the estimated value of the missing assets on their respective exchange, estimated to be approximately $9 billion for FTX.com and $166 million for FTX.US, the U.S. branch of the exchange.

It is noteworthy, however, that the ultimate recoveries may be influenced by various factors, including tax considerations, government claims, fluctuations in token prices, and other variables.

Furthermore, the debtors reserve the right to exclude any individuals classified as "insiders, affiliates, customers" from the settlement. This includes individuals who may have had knowledge of the mingling and misuse of customer deposits and corporate funds, or those who altered their KYC information to facilitate withdrawals during periods when withdrawals were temporarily halted.

The debtors have clarified that the compensation for these individuals may not necessarily reflect the full and precise value of the FTX debtors' claims.

Read more: Bitcoin Price Dynamics: Unveiling Alameda's Moves


Read more about

Related News

Sign up for daily crypto news in your inbox

Get crypto analysis, news and updates right to your inbox! Sign up here so you don't miss a single newsletter.