U.S. Bankruptcy Judge John Dorsey approved FTX’s bankruptcy plan to repay its crypto customers in cash plus interest. The plan allows FTX to fully repay customers using $16 billion in assets recovered since the defunct crypto exchange collapsed.
Judge Dorsey approved the wind-down plan at a court hearing in Wilmington, Delaware on Monday. The final approved plan is built on a series of settlements with FTX customers and creditors, U.S. government agencies, and liquidators appointed to wind down FTX’s operations outside the United States. The plan also allows FTX to pay off settlements for customers who fell victim to the exchange’s collapse first. Following those users, FTX will be able to pay potentially competing claims filed by government regulators.
In addition, FTX’s plan will pay its customers at least 118% of the value in their accounts as of November 2022, the date that the company filed for bankruptcy. An exact start date for the plan to take action remains unknown.
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FTX company raised additional funds for the plan by selling off other assets, including investments in tech companies like the Anthropic, an AI startup. The company said the result was a victory for creditors, but the reaction from customers has been a bit more mixed. Many investors expressed disappointment that FTX’s demise caused them to miss out on a strong rebound in crypto prices. Some customers had even objected to the plan, demanding higher repayments reflecting recent rises in crypto values.
FTX filed for bankruptcy in 2022. It had misappropriated the use of billions of dollars of invested funds. In March 2024, the firm’s former CEO, Sam Bankman-Fried, was sentenced to 25 years in prison for his role in the fraud scheme.