After nearly two years since FTX's collapse, Judge John Dorsey of the US Bankruptcy Court has officially approved the FTX Bankruptcy plan. This decision brings relief to many who had their funds locked in the exchange.
What's Next for Creditors?
With the court's approval, FTX will distribute a total of $6.6 billion to its creditors over the next 4 to 8 weeks. A recent vote showed 94% of creditors supported the payout plan for “dotcom customer entitlement claims.” This development offers hope to those awaiting the return of their funds.
Concerns Amid Approval
Not everyone is on board, however. Sunil Kavuri, representing some creditors, expressed concerns about the payout method, advocating for cryptocurrency returns instead of cash. Despite this, the plan allows 98% of creditors to receive 118% of their funds in fiat, potentially totaling up to $16 billion.
The Impact of the FTX Collapse
The fallout from the FTX collapse continues to affect many. The exchange lost about $8 billion of customer funds, primarily in collaboration with Alameda Research. Under John Ray III, FTX has been working to recover mismanaged assets, taking legal action against rival exchanges and reclaiming funds donated by founder Sam Bankman-Fried.
Uncertain Future for FTX
As FTX prepares for payouts, its future remains uncertain. Initially, John Ray III expressed optimism about possibly restarting the firm, but efforts to attract investors have reportedly faltered. The uncertainty surrounding FTX 2.0 plans adds to the questions about the company's direction.
Ongoing Legal Matters
Meanwhile, Sam Bankman-Fried is appealing his 25-year prison sentence, claiming it is excessive. In contrast, Caroline Ellison, former CEO of Alameda Research, accepted her two-year sentence, admitting she lacked the courage to distance herself from FTX and Bankman-Fried.
As the bankruptcy proceedings conclude, the focus shifts to how effectively FTX can execute the approved plan and what lies ahead for its stakeholders.
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