As a researcher with a background in bankruptcy and cryptocurrency, I find FTX’s recovery to be an extraordinary turn of events. The proposed plan to repay creditors with billions more than needed is a remarkable achievement, especially considering the company owed around $11 billion to customers and other non-governmental creditors.
On May 7, I came across an important filing made by FTX in their ongoing bankruptcy case. Specifically, they submitted an amended Plan of Reorganization and Disclosure Statement to the court.
The company has put forward a plan to reimburse its creditors an amount between $14.5 billion and $16.3 billion, which it obtained by selling assets and merging resources from different entities under its control. Its debt towards non-governmental creditors, including customers, amounts to approximately $11 billion.
The amount surpasses the customers’ losses during the exchange’s collapse in November 2022 by billions of dollars, bringing welcome news for creditor compensation.
FTX Back in The Black
In the announcement, it was mentioned that my findings indicate FTX’s successful recovery was primarily due to monetizing an eclectic mix of assets. A significant portion of these assets were initially owned by Alameda or FTX Ventures through proprietary investments. Additionally, a substantial contribution came from litigation claims.
As a researcher, I’ve come across an important update regarding the ongoing bankruptcy proceedings of FTX Debtors. Today, they have submitted their anticipated amended Plan of Reorganization and Disclosure Statement to the U.S. Bankruptcy Court for approval. For more details, check out the link below.
— FTX (@FTX_Official) May 7, 2024
As a researcher examining the proposed plan, I can share that approximately 98% of FTX creditors with claims below $50,000 are expected to receive around 118% of their allowed claim amounts in cash within two months following the plan’s approval.
Nondiscriminately, other unsecured creditors, excluding government entities, would be paid in full according to their allowable claims and could potentially earn extra interest of as much as 9%, starting from the time FTX initiated bankruptcy proceedings.
John Ray, CEO of FTX, expressed astonishment, stating, “This is an extraordinary outcome in any bankruptcy case.”
“He announced, ‘It gives us great satisfaction to put forward a Chapter 11 plan allowing non-governmental creditors to be fully repaid, including their initial claims and accrued interest.'”
As a researcher, I’ve come across information indicating that FTX has made amicable resolutions with both the Internal Revenue Service (IRS) and the Commodity Futures Trading Commission (CFTC) to address substantial claims against them.
The goal is to establish a fund, using regulatory recoveries that were originally intended for them, to make additional payments to certain creditors instead.
However, the payouts are still several months away as the firm finalizes its bankruptcy case.
Crypto Recovery
As a crypto investor, I’ve noticed that a significant portion of my surplus funds can be attributed to the rebound in the cryptocurrency market. Among my hefty investments, Solana has played a substantial role in this recovery.
Prices for Solana (SOL) have experienced a significant increase, rising over 1,100% since their dip below $12 in November 2022 following the cryptocurrency exchange turmoil.
I’ve observed that Solana (SOL) is currently hovering around the $149 mark after experiencing a 4.5% drop in value today. This comes after reaching a 2024 high of $208 in mid-March. However, it’s important to note that SOL is still 43% lower than its peak price from November 2021, which stood at $260.
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2024-05-08 15:25