FTX, the once-prominent cryptocurrency exchange that collapsed spectacularly, has proposed a reorganization plan that could see nearly all creditors receive more than their original claims. In a court filing, FTX estimated owing $11.2 billion to creditors but has managed to amass between $14.5 billion and $16.3 billion to distribute.
The plan proposes that creditors with claims of $50,000 or less, which accounts for around 98% of creditors, will receive approximately 118% of their allowed claim amount. This unexpected outcome is thanks to FTX’s ability to raise funds by selling various assets, including venture investments and holdings from Sam Bankman-Fried’s crypto hedge fund, Alameda.
One of the most significant asset sales involved FTX’s stake in the AI firm Anthropic, backed by Amazon, which garnered nearly $900 million. The need for alternative funding sources arose due to a substantial amount of missing cryptocurrency from the exchange.
John Ray III, the CEO appointed after Bankman-Fried’s resignation, expressed satisfaction with the proposed plan, stating that it contemplates “the return of 100% of bankruptcy claim amounts plus interest for non-governmental creditors.”
While the reorganization plan still requires court approval, it offers a glimmer of hope for FTX customers who have had their funds locked up since the exchange’s bankruptcy filing in November 2022, following Bankman-Fried’s conviction on multiple criminal charges related to the misappropriation of customer funds.
