% 0.03
BTC Dominance:
% 0.13
Market Cap:
$2.34 T
% 0.00
Fear & Greed:
53 / 100
$ 64.247
BTC Dominance:
% 54.1
Market Cap:
$2.34 T

FTX Proposes Bold Reorganization Plan, Promising 98% Payback to Creditors


FTX, already a defunct cryptocurrency exchange, is now trying to recover from bankruptcy by announcing a huge reorganization plan that invests more than it earlier proposed and claims back more than 98% of the creditors. Per records filed on last Tuesday’s date, the plan gives an unbelievable payout on debt within 60 days after approval of the lawsuit in the 118% denominator of the debt and money.

Striving for Fairness: Unprecedented Payback Rates

As per the given proposal, non-government creditors are also among the major beneficiaries, since they are awarded a total of 100% of their claims plus the same interest set at 9% to cover the time value of their claims. The abovementioned proposal consolidates the fact that FTX is looking to correct the financial problems of its shareholders that were a result of the failure. But its future still depends on the imperial decision that would be made by the Delaware bankruptcy court, which is an impartial authority in bankruptcy cases.

Exceeding Expectations: A Testament to Diligence

According to the propositions, all the tokens that were initially assumed by FTX Estate as having a 90% reimbursement of customer funds scarcely facilitate the liquidations that are required. In February, John Jay Ray, the permanent CEO of FTX, was dismissive, believing that he would reimburse client balances in full. However, the attorneys expressly stressed the fact that the status of the market after the crash at FTX cannot be the only reason for the extensive funds available to collectors of the NFT industry. Instead, they emphasized the meticulous approach of collecting the exotic assets on the secondary market for half a year as the major reason for the large funds available in the industry.

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Rigorous Asset Liquidation: A Road to Redemption

The FTX estate press release describes the tedious aggregate of worldly assets and only then the liquidation thereof, which is estimated to have a significant reserve of $14 million and $16 million, respectively.  Equitable, the estate concentrates on the lack of a significant part of investors’ status in Bitcoin and Ethereum, confirming that they are ineligible to benefit from their appreciation throughout the bankruptcy proceedings.

Facing Regulatory Scrutiny: Clearing Hurdles

Along with giving the creditors the chance to save their involvement in the case, the reorganization scheme devised by FTX also takes into consideration the regulatory rulings by the Internal Revenue Service and the CFTC. In addition, the IRS departed from their $24 billion claims for a $200 million cash payment representing a $685 million unsecured debt claim (or second lien). Simultaneously, it was accepted by the government entities mentioned, which included the CFTC, to give preference to the claims that were not superior by upgrading the priority of full restitution to the users and investors.

The Shadow of Sam Bankman-Fried: A Lingering Controversy

In the midst of this deplorable fincatastrophe stands the existence of the former CEO of FTX, Sam Bankman-Fried, who was inadvertently declared guilty of fraud. In his mission to safeguard the business from a possible bankruptcy, he cited the objective of repaying all existing customers. However, this stirred a methodological argument from users. However, Bankman-Fried’s defense was undermined. The court remained unconvinced by the fact that he had not harmed consumers during his sentencing and handed him a 25-year sentence instead, which was proof of his misdoings.

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Towards Redemption: A Glimmer of Hope

As the already-proven FTX’s revival strategy walks the fine line with legal scrutiny, creditors and stakeholders around the world are waiting for the June hearing, which is widely believed to be the most essential act in their pursuit of financial repayment. The effort will not only repair the damage but also exhibit the inherent vigor in the virtual money market. It indicates that the crypto community remains strong even after an incident that shook everyone.

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