FTX plans to fully repay all its creditor’s claims plus “billions in compensation for the time value of their investments” with 98% slated to get up to 118% back — only for those claiming $50,000 or under.
In a May 7 statement, the bankrupt crypto exchange said the plan was “subject to being finalized and approved” by a Delaware Bankruptcy Court.
Only creditors holding claims in an allowed amount below $50,000 will be eligible for the 118% recovery, which FTX anticipated was “98% of the creditors of FTX by number.”
FTX’s plan still reimburses creditors for the value of their assets at the time of its bankruptcy in November 2022.
Since that date, the crypto markets have seen a resurgence, with Bitcoin rising by nearly 280%.
“We are pleased to be in a position to propose a Chapter 11 plan that contemplates the return of 100% of bankruptcy claim amounts plus interest for non-governmental creditors,” said FTX CEO and chief restructuring officer John J. Ray III.
FTX estimated the total value that will be distributed to creditors will range between $14.5 and $16.3 billion.
The proposed repayment would occur within 60 days after the effective date of the plan.
The $32 billion cryptocurrency exchange collapsed in November 2022, revealing a $8 billion hole that its new management has been trying to recover in the years following.
Among those efforts include a $884 million sale of shares in artificial intelligence firm Anthropic in March, which accounted for a majority of FTX’s stake in the firm.
FTX confirmed in January that its restructuring plans will not include a reboot of the cryptocurrency exchange, which was among the largest platforms by trading volume prior to it collapsing.