FTX Trading Ltd. has unveiled a new plan aimed at settling its bankruptcy case, initiating discussions on how to resolve the lingering issues surrounding the crypto firm’s fraud-ridden downfall.
However, the proposed reorganization plan raises significant queries regarding the potential revival of FTX’s crypto exchange, the valuation process for certain digital assets, and the expected returns for creditors.
The plan is anticipated to undergo revisions before being presented to creditors for voting next year, followed by final approval from US Bankruptcy Judge John Dorsey. Despite this, major creditor and customer groups have tentatively agreed to the broad outlines of the proposal.
The proposed payout blueprint outlines a cash distribution to creditors following the liquidation of a substantial portion of the company’s cryptocurrencies.
The bankruptcy stems from the conviction of FTX founder Sam Bankman-Fried for orchestrating a substantial fraud that led to the collapse of the FTX exchange.
Following Bankman-Fried’s relinquishment of control to restructuring professionals last year, the company has been focused on identifying assets and resolving complex debts owed to diverse creditors, including users who had funds deposited in both cash and crypto on the platform.
