- FTX creditors will receive 119% of their claims, which is a recovery from a $16 billion bankruptcy fallout.
- The crypto market shows mixed reactions, with Bitcoin up 260% since FTX’s collapse but trading reduced post-approval.
- Judge Dorsey acknowledges FTX’s reorganization plan, but some creditors are unhappy with cash-only repayments amid crypto gains.
FTX’s reorganization plan has been accepted by a federal bankruptcy judge, providing an opportunity for a $16 billion payback to creditors. This decision was made almost two years after the FTX scandal.
Delaware Judge John Dorsey stated that 98% of the creditors will receive 119% of their claims based on values from November 2022. Consequently, this move marks a development in the largest and most complex bankruptcy estate asset distribution in history.
Breakdown of FTX Claims
FTX claims total approximately $16 billion, reflecting the fallout from its bankruptcy. The comparison with other major financial events is striking. For instance, Mt. Gox claims amount to $8.8 billion, representing a significant historical crypto exchange collapse.
Additionally, the German government’s sales pressure stands at $3.5 billion, illustrating a large sell-off of state-held assets. On a different note, Michael Saylor’s average Bitcoin purchase amounts to just $0.2 billion, a fraction of the other figures.
FTX has collected between $14.7 billion and $16.5 billion worth of property for distribution. Furthermore, John Ray, the new CEO, has stated that the estate is preparing to finalize arrangements for global creditor distributions.
Implications for Creditors and Market Response
Most creditors of the failed crypto company FTX will profit from their investments. Judge Dorsey commended the plan as a model for dealing with complex Chapter 11 bankruptcy cases. However, some victims criticized the decision to repay exclusively in cash. They argue that this excludes them from benefiting from the crypto market’s resurgence.
Additionally, the price of Bitcoin has surged roughly 260% since FTX’s collapse, reaching about $62,400. However, the cryptocurrency market remains muted after the ruling. Ethereum dipped to $2,430, while Solana fell to $145. Notably, the token FTT jumped 20.1% to $4.60, despite having no fundamental value outside of FTX operations.
The post Judge Dorsey Approves FTX Bankruptcy Plan and Creditors Set to Reclaim 119% of Claims appeared first on Crypto News Land.
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