FTX Set to Fully Refund Most Customers Post-Collapse

CNBC reports that FTX plans to refund nearly all users impacted by last year’s financial crisis.

This news comes as a relief to many who feared their investments were lost forever. Let’s discover more about this news from FTX.

FTX Prepares to Repay Majority of Affected Users

The exchange has reported that it owes approximately $11.2 billion to its creditors. However, it has also revealed that it currently possesses between $14.5 billion and $16.4 billion in assets available for distribution. This substantial amount exceeds the debts FTX has acknowledged, positioning the company to meet its obligations. Additionally, it may allow FTX to repay some customers more than their initial claims.

Under the proposed reorganization plan, FTX has outlined specific repayment details that indicate an over 100% repayment rate for certain groups of creditors. Specifically, customers with claims of $50,000 or less are set to receive 118% of their claim amount. Furthermore, the plan stipulates that 98% of all creditors will be able to access this repayment scheme. If approved, this plan would significantly relieve most affected users, whose funds have been frozen since the platform’s collapse.

The ability to amass such a significant pool of funds for repayment stems from the sale of assets and venture investments made by FTX and Alameda Research, the two entities primarily involved in the financial turmoil. These sales and investments have evidently been fruitful, allowing FTX to propose a recovery plan that not only returns the principal amounts but, in some cases, provides an additional financial buffer to its creditors.

However, it is important to note that while FTX has prepared this plan, it still requires approval from a bankruptcy court. This upcoming court decision is critical as it will determine whether the proposed repayment structure can be implemented as designed.



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