FTX, one of the largest cryptocurrency trading platforms, has announced that it plans to repay its creditors in full, as well as billions in compensation for the time their investments have been held.
An unprecedented repayment plan
The repayment plan proposed by FTX is unprecedented in cryptocurrency history. Under the plan, 98% of creditors could receive up to 118% of their claims, while the remaining creditors could be repaid in full, plus billions in compensation for the time their investments were held.
A change of direction
This repayment plan is a change of direction from FTX's original strategy, which was to repay creditors for the value of their assets on the date of the company's bankruptcy in November 2022. Since then, cryptocurrency markets have experienced a resurgence, with the price of Bitcoin (BTC) rising by over 200%.
A high repayment amount
FTX estimates that the total amount of assets collected and converted into cash for distribution to creditors will be between $14.5 and $16.3 billion. Only creditors with claims of less than $50,000 will be eligible for the 118% refund, if the plan is approved by the bankruptcy court.
A fast repayment process
The repayment process is scheduled to take place within 60 days of the plan's effective date. FTX has also confirmed that its restructuring plan does not include the takeover of the cryptocurrency trading platform, which was one of the largest platforms by trading volume prior to its bankruptcy.
