- A liquidation plan put out by FTX’s creditors aims to repay clients in cash within a few months.
- The stages leading up to this point were outlined by an attorney representing FTX.
Bankrupt cryptocurrency exchange FTX has asked a US court to let creditors vote on the best liquidation plan, and the judge has granted their request. Despite earlier objections stating a reduction in asset payments, creditors of the collapsed exchange will vote on a liquidation plan.
A liquidation plan put out by FTX’s creditors aims to repay clients in cash within a few months. John Dorsey, the bankruptcy judge, overruled the creditors who were opposed to the voting plan documents and gave his approval.
The stages leading up to this point were outlined by Andy Dietderich, an attorney representing FTX, who described it as a massive team effort. Among other things, the insolvent company liquidated its holdings in real estate, venture capital, and other IT companies.
Disparity in Crypto Prices
Moreover, the firm has managed to recoup around $16 billion to settle its debts after its demise and bankruptcy. Among them are $12 billion in cash, with intentions to pay clients with interest. Several creditors argued that the claim of “full recovery” was unjust because it was far lower than the existing values.
Due to its collapse in November 2022, the market suffered massive losses. FTX was the second-largest crypto exchange at the time. There was a domino effect in crypto regulation and market sentiment as a result of the billions of dollars in losses.
The idea was challenged by many FTX creditors who pointed to the disparity in cryptocurrency prices between 2022 and the present, due to the price surge this year, as the reason. They claim that creditors will get less than market value since it is not a complete recovery.
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