After a tentative settlement was agreed between FTX debtors and creditors, users of the insolvent cryptocurrency exchanges FTX and FTX US may receive a return of more than 90% of their holdings by the end of the second quarter of 2024.
The FTX debtors announced a “major milestone” in their Chapter 11 proceedings on October 17. a committee of non-US customers, class action plaintiffs, and the committee of unsecured creditors after “extensive discussion” about customer property problems.
On October 16, the FTX debtors gave notice of the proposed settlement to the United States Bankruptcy Court in Delaware. To obtain the court’s approval, they must formally file by December 16. The FTX debtors estimated that FTX.com and FTX.US customers would get 90% of the assets that are eligible for distribution in the “shortfall claim,” a part of the modified plan.
For FTX.com and FTX.US, the estimated shortfall claims are $8.9 billion and $166 million, respectively. FTX estimates that this money will be distributed by the end of the second quarter of 2024, assuming the bankruptcy court permits.
John J. Ray III, the CEO and chief restructuring officer of FTX, expressed satisfaction with the terms of the settlement, noting that “Together, starting in the most challenging financial disaster I have seen, the debtors and their creditors have created enormous value from a situation that easily could have been a near-total loss for customers.”
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