FTX’s Big Comeback: A Glimpse into the Asset Return Game Plan
The bankruptcy of the famous crypto exchange FTX took many customers and experts by surprise. After all, it was one of the largest companies in the segment, controlling a huge number of payments.
But hold onto your hats because FTX is making headlines again, this time with a silver lining for those left in the lurch.
FTX Debtor Recovery Path Diagram
Amidst the rubble, FTX has crafted a recovery roadmap to mend fences with its debtors. If you’ve been biting your nails over this or you’re just crypto-curious, here’s the scoop.
FTX’s return on assets plan divides payments into three stages:
- One intended for customers of the FTX.com website,
- another for the US exchange users,
- and a third stage for general payments, including clients affected by the Canadian bankruptcy, who used FTX Canada.
In total, there will be 9 billion dollars for FTX debtors. It’s a lofty promise from a company that once boasted a billion-dollar revenue stream annually.
Furthermore, it will be one of the largest agreements of its kind ever. Many experts had cast doubts over the odds of debtss never being paid due to the high value and the high number of FTX debtors.
FTX Crypto Exchange Submits Plan to Court
Before the company’s plan can be put into practice, it must be approved by the Bankruptcy Court of the State of Delaware in the United States.
It is important to remember that the company underwent an in-depth investigation in the country in different aspects. This investigation ranged from statements by its CEO to the sale of some securities carried out by the service.
Circle December 16 on your calendar – that’s when the court is slated to weigh in. Though, there may be changes or postponements, as it is one of the most complex processes in recent years.
The Deal on the Table for FTX Clients
As teased earlier, the proposed return on assets plan aims to recover more than 90% of client assets from both FTX and FTX.US. On the one hand, the estimate is that payments will reach US$8.9 billion for FTX.COM. For FTX.US, the value is much lower, US$166 million.
The agreement also provides for payments to be completed by the second quarter of 2024.
Yet, it’s not all rainbows. Debates are brewing over the real deal behind this plan. A spicy tidbit is the fact that payments are made with funds that the FTX Canada and all its subsidiaries managed to recover. However, they do not necessarily cover the full value of what their clients lost after the global and Canadian bankruptcy of the company.
Additionally, the distribution of funds changes depending on how payments are made. In other words, customers who choose to receive payments in cryptocurrency and those who prefer dollars can have completely different experiences.
Finally, some clients might have to cough up fees for retaining amounts withdrawn from their accounts before bankruptcy.
The Delaware court verdict is bound to spill all the beans on this, so the crypto world is all eyes and ears for it.
