A recent decision by a US bankruptcy court has given FTX the green light to move forward with a liquidation plan that involves paying customer claims in cash. This plan, which is set to pay customers based on crypto prices at the time of FTX’s collapse in November 2022, has faced objections from customers who believe that they are entitled to higher amounts due to the rise in cryptocurrency prices.
Despite objections raised by some creditors, FTX CEO John J. Ray III has defended the cash payment plan, stating that it is impossible for the company to return the crypto assets that customers had deposited prior to the bankruptcy filing. Ray emphasized that FTX only held a small fraction of the Bitcoin and Ethereum shown in customer balances at the time of the collapse, making it unfeasible to honor claims based on current market prices.
Customers have until Aug. 16 to vote on the proposed liquidation plan, with final approval expected to be sought on Oct. 7. The plan aims to provide a swift resolution to customer claims, with the majority of customers anticipated to receive their owed amounts within 60 days of the court approving FTX’s wind-down plans. Additionally, customers with claims under $50,000 will have the option for expedited payment.
Reports indicate that FTX currently has $11.4 billion in assets, with the potential to increase this figure to $12.6 billion by the end of October. This financial stability will play a crucial role in fulfilling customer claims and ensuring a smooth liquidation process.
FTX’s approval to solicit votes on its liquidation plan marks a significant milestone in the company’s efforts to address customer claims and wind down its operations. While some customers may be dissatisfied with the proposed cash payment amounts, FTX is committed to providing a fair and equitable resolution to all stakeholders involved in the bankruptcy proceedings.
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