Crypto exchange FTX liquidation plan gets court approval Reuters

By Dietrich Knauth

NEW YORK (Reuters) – FTX received court approval on Monday for its bankruptcy plan, which will allow it to repay customers in full using $16 billion in assets recovered from the erstwhile cryptocurrency exchange crash.

U.S. Bankruptcy Judge John Dorsey approved the liquidation plan at a court hearing in Wilmington, Delaware.

The plan is based on a series of agreements with FTX’s customers and creditors, US government agencies and liquidators appointed to wind down FTX’s non-US operations.

The agreements allow FTX to use its assets to reimburse customers of the cryptocurrency exchange, before paying potentially competing demands from government regulators.

Once among the world’s leading cryptocurrency exchanges, the fall of FTX has rocked the sector, leaving some 9 million customers and investors facing billions of dollars in losses.

The FTX plan will pay its customers at least 118% of the value in their accounts starting in November 2022, the date the company filed for bankruptcy.

FTX said the outcome was a win for creditors, made possible by its ability to recover cash and crypto assets that disappeared during the company’s chaotic collapse. The company has also raised additional funds by selling other assets, including its investments in technology companies such as artificial intelligence startup Anthropic.

Clients had a mixed response to the plan, with many expressing disappointment that FTX’s demise had caused them to miss out on a strong rally in crypto prices since the market bottomed out in 2022. Some clients opposed the plan, demanding larger refunds, reflecting recent repayments. increases in cryptocurrency values.

FTX said that it was not possible to simply return the crypto assets that customers had deposited because the customer assets disappeared, misappropriated by founder Sam Bankman-Fried.

Bankman-Fried was sentenced in March to 25 years in prison for defrauding FTX customers. He appealed his conviction.