The plan “provides for the centralized distribution to clients and other creditors around the world of substantially all assets associated with FTX at the time of its collapse in November 2022,” according to a statement released by FTX Trading LTD.
Total returns to customers will range between $14.5 billion and $16.3 billion. FTX clarified that the plan must still be approved by a Delaware bankruptcy court.
The plan “provides for the return of 100% of the bankruptcy claim amounts plus interest to non-government creditors,” said John Ray III, CEO and chief restructuring officer at FTX.
FTX maintained that it obtained the funds by “monetizing an extraordinarily diverse collection of assets,” mostly investments held by the company and its affiliates and litigation claims.
Another factor was the resolution of claims against the company, including about $24 billion that the US Internal Revenue Service (IRS) had requested for the period before the compensation plan was presented.
To resolve the IRS cases, FTX will pay $200 million in cash and $685 million to be paid after adjusting other claims.
The company’s former boss, Sam Bankman-Fried, conquered the world of cryptocurrencies at breakneck speed, co-founding the small start-up FTX in 2019 and turning it into the second largest exchange platform in the world.
But in November 2022, the empire suddenly collapsed following an avalanche of customer withdrawals upon learning that part of the funds deposited with the company had been committed to risky operations.
Thus, after a barrage of lawsuits, Bankman-Fried, a multimillionaire before the age of 30, was sentenced in March to 25 years in prison after being convicted of fraud and other financial crimes.
Source: With information from AFP.
