FTX’s restructuring plans are continuing at full speed, and the new management appointed to manage the process plans to end the bankruptcy process soon. According to incoming information, the team has entered the final round of discussions regarding the payment of billions of dollars in funds to affected customers and creditors.
FTX’s Restructuring Plan
The crypto world is closely following developments regarding FTX, which shook the cryptocurrency market with its bankruptcy in 2022. FTX, the giant cryptocurrency exchange, has presented its final proposal outlining the plan to refund billions of dollars to customers and creditors. This move indicates that discussions regarding the resolution of the bankruptcy case involving the crypto company, which has been overshadowed by fraud issues, have reached the final stage. However, several critical questions in the restructuring plan remain unanswered; the reopening of FTX, the valuation methodology to be applied to cryptocurrencies held in wallets, and the expected returns for creditors.
Improvements to the restructuring plan scheduled for creditor voting next year and the inclusion of more important details in the plan are expected. Following the creditor vote, final approval will be sought from U.S. Bankruptcy Judge John Dorsey. In particular, large creditor and customer groups involved in the Chapter 11 bankruptcy case have reached a consensus on the general outlines of the restructuring plan. The proposed repayment plan is based on the distribution of billions of dollars in cash, contingent on the liquidation of a significant portion of the company’s cryptocurrencies.
Developments in the bankruptcy case are undoubtedly closely monitored by stakeholders and the crypto world at large, and whether FTX will reopen is one of the most curious issues. Last month, it was revealed that FTX management had various discussions with bidders for reopening the crypto exchange and explored various strategies that could be employed after bankruptcy. Investment banker Kevin M. Cofsky recently explained ongoing discussions with potential investors and various options, including selling the crypto exchange or establishing partnerships.
Sam Bankman-Fried Convicted of Fraud
FTX’s founder and former CEO Sam Bankman-Fried was found guilty last month of managing a significant fraud scheme that resulted in the bankruptcy of the cryptocurrency exchange. As is known, the company began bankruptcy proceedings last year after Bankman-Fried handed over his role to restructuring experts.
As the process progressed, advisors embarked on a lengthy exploration in a convoluted network of debts, including identifying the company’s assets and debts to various creditors, encompassing customers with funds in both cash and cryptocurrency on the trading platform.
