FTX cryptocurrency exchange, which went bankrupt in November 2022, has revealed that a new debt settlement plan will be proposed that would let almost all the creditors of the exchange be paid off in full. On May 7, the company announced that it will try to pay 100% of the allowable bankruptcy claim amounts and interest to non-governmental creditors. This change is a departure from previous developments that used to only cover asset value at the time of bankruptcy.

The plan in question is awaiting finalization and approval of a Delaware Bankruptcy Court. Given by FTX CEO and chief restructuring officer John J. Ray III, the better financial prognosis is attributed to a recent bull run of the cryptocurrency markets, in which only Bitcoin has appreciated more than 200% since the bankruptcy. FTX have successfully gathered and liquidated some of the assets with cash worth of $14.5 to $16.3 billion to be distributed among the creditors.

Eligibility and compensation details

The 118% is still subject to the courts on the new plan to those creditors who have claims amounting less than $50,000. This is intended for a more favorable treatment of smaller creditors who, as a result of the bankruptcy, may have been disproportionately affected. The plan specifies that these payments be made within 60 days once the plan takes effect, the quick resolution of the affected parties.

Among other measures, FTX has been actively recuperating funds after declaring insolvency, among other things through selling off a number of investments. One of the prominent trades was liquidating shares of $884 million in the artificial intelligence company Anthropic, which formed a significant part of its portfolio. These initiatives have been at the heart of FTX’s tactic to accumulate the required capital to pay off the suggested repayments.

FTX’s repayment plan aims for financial stability

The recent declaration also serves to assure that FTX will not re-open as an exchange for cryptocurrencies. The emphasis will rather be on reorganization and creditor claims satisfaction which is in line with the significant recovery efforts in its investment portfolio. This approach is consistent with FTX’s mission to compensate for the financial harm suffered by its creditors and to preserve its remaining assets in order to stabilize them.

The proposal by FTX could be described as a major repayment effort in the history of bankrupt cryptocurrency exchange companies. If accepted, it will form a model for digital finance companies to operate willingly during the recovery period post-crisis that will be based on restitution and responsibility.

Earn more PRC tokens by sharing this post. Copy and paste the URL below and share to friends, when they click and visit Parrot Coin website you earn: https://parrotcoin.net0

PRC Comment Policy

Your comments MUST BE constructive with vivid and clear suggestion relating to the post.

Your comments MUST NOT be less than 5 words.

Do NOT in any way copy/duplicate or transmit another members comment and paste to earn. Members who indulge themselves copying and duplicating comments, their earnings would be wiped out totally as a warning and Account deactivated if the user continue the act.

Parrot Coin does not pay for exclamatory comments Such as hahaha, nice one, wow, congrats, lmao, lol, etc are strictly forbidden and disallowed. Kindly adhere to this rule.

Constructive REPLY to comments is allowed