FTX Bankruptcy Plan Approved: How Much Will Creditors Really Get Back? 

The bankrupt crypto exchange FTX has achieved a significant victory in its recovery efforts. U.S. Bankruptcy Judge John Dorsey approved the plan to repay creditors, allowing the exchange to use its recovered assets worth $16.5 billion for this purpose. Since FTX filed for bankruptcy two years ago, millions of investors have been left in limbo, unsure about the fate of their funds. With the court’s approval, creditors are now hopeful about recovering their investments.

Let’s explore what this means for the average user.

How the Repayment Plan Works

The repayment plan focuses on FTX’s smaller customers—those with account balances of $50,000 or less. Remarkably, around 98% of customers are expected to see some repayment. Judge Dorsey described this case as a “model” for handling complex Chapter 11 bankruptcies. Much of this success resulted from negotiations between FTX, creditors, customers, and regulators, allowing for significant customer repayments before the exchange addresses other obligations, such as tax debts and penalties.

Unexpected Gains for Creditors

One noteworthy detail is that non-governmental creditors could receive up to 119% of their claimed amounts, surpassing many expectations. This news is especially significant as Bitcoin has rebounded, rising from about $16,000 during the FTX crash to over $63,000 today.

However, not all customers are pleased; some feel disappointed because they won’t recover the full current value of their assets.

Understanding the Downfall of FTX

FTX’s fall from grace was ugly, to say the least. The founder, Sam Bankman-Fried, was hit with a 25-year prison sentence for fraud. He used customer funds to bail out his hedge fund, Alameda Research, which exposed serious mismanagement within FTX. Now, the company is negotiating with the U.S. Department of Justice about the $1 billion that was seized during Bankman-Fried’s trial. That money could help out FTX shareholders, though they’re last in line in bankruptcy cases.

Despite the chaos, FTX’s new CEO, John Ray, has pointed out the progress made so far. The company has recovered between $14.7 billion and $16.5 billion in assets that are ready for distribution. Ray, known for handling Enron’s bankruptcy, called this plan a major step forward for FTX, expected to benefit creditors across more than 200 regions.

Any Hope for FTX Creditors?

With the plan now approved, customers may start seeing payouts within 60 days after the official launch date—though that date has not been set yet. Many former FTX users have been waiting nearly two years, and anticipation is high. While getting their funds back is a win, it doesn’t erase the stress and uncertainty they experienced when FTX first collapsed.

This whole ordeal with FTX is a hard lesson in the risks of crypto investing. Although financial recovery is on the horizon, the emotional scars of FTX’s downfall will linger for many. How things turn out from here could shift the narrative for those who lost faith in crypto after FTX went under.

• Also Read :
•   Largest Crypto Sale Ever?! U.S. to Auction $4.4B Seized Silk Road Bitcoin
•   ,