FTX Seeks To Refund 90% Of Funds, Defying The Odds

Crypto exchange FTX announced its intention to refund more than 90% of the funds to its customers.

This decision is part of the revised Plan of Reorganization, which is expected to be submitted by Dec. 16, 2023.

If the plan gains approval from the bankruptcy court, distributions could commence by the second quarter of 2024.

This development will be a key topic of discussion at Benzinga's Future of Digital Assets conference on Nov. 14, where industry leaders will discuss the future landscape of cryptocurrency and its impact on global markets.

According to John J. Ray III, CEO and chief restructuring officer of FTX: "Together, starting in the most challenging financial disaster I have seen, the debtors and their creditors have created enormous value from a situation that easily could have been a near-total loss for customers."

The amended plan would see FTX's assets divided into three distinct categories: assets set aside for FTX.com and FTX.US customers, and a "general pool" of other assets.

Furthermore, the company estimates the shortfall claim would amount to around $8.9 billion for FTX.com and $166 million for FTX.US.

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This restructuring makes sure 66% of the general pool is dedicated to offsetting the shortfall claims.

It's crucial to note, that while the initiative is geared towards reimbursing over 90% of the global distributable value to FTX.com and FTX.US customers, it doesn't necessarily guarantee full payment.

Several factors could influence the final recovery amount, including asset prices, litigation outcomes and regulatory claims, among others.

In addition, the customer shortfall settlement also offers an opportunity for eligible customers to settle their potential preference exposure.

Eligible customers who approve the amended plan can opt for a settlement by reducing their claim or paying a specified cash amount.

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