Failed cryptocurrency exchange FTX says that nearly all of its customers will receive money back that they are owed which was tied to the platform, along with additional compensation.
In a bankruptcy court filing FTX said that it owes about $11.2 billion to its creditors. The exchange estimates that it has between $14.5 billion and $16.3 billion to distribute to them. FTX said customers with claims of $50,000 or less — about 98% of all of its creditors — will get at least 118% of allowed claims in cash within 60 days of court approval of the proposed plan.
ABC NEWS reports that the filing states that after paying claims in full, the plan provides for supplemental interest payments to creditors, to the extent that funds still remain. The interest rate for most creditors is 9%. It added that other creditors would receive “100% of allowed claims plus billions in compensation for the time value of their investments.” The filing added that “the monetization effort has been successful and the debtors currently expect to have approximately $12.8 billion in cash as of the expected effective date of the plan, enough to pay all non-governmental customers and creditors in full based on the petition date value of their claims, subject to the conditions and assumptions described in this disclosure statement.”
FTX said in a Wednesday statement that “subject to being finalized and approved by the bankruptcy court, the plan contemplates the centralized distribution to customers and other creditors around the world of virtually all of the assets associated with FTX at the time of its collapse in November 2022, regardless of where the assets were located at that time.”
The repayment plan includes a proposed agreement with the Department of Justice to distribute more than $1.2 billion of forfeiture proceeds to FTX customers and creditors through the Chapter 11 cases. John J. Ray III, CEO and Chief Restructuring Officer of FTX, said in a statement: “We are pleased to be in a position to propose a Chapter 11 plan that contemplates the return of 100% of bankruptcy claim amounts plus interest for non-governmental creditors.”
Editorial credit: Sergei Elagin / Shutterstock.com