In a recent development, bankrupt cryptocurrency exchange FTX has announced a draft creditor repayment plan as part of its ongoing bankruptcy reorganization process. The newly revamped exchange intends to settle customer claims with cash as well as liquidate its FTT digital token.

A Look At The Plan

The draft creditors' payment plan is the result of feedback from the stakeholders of the platform. As per the plan, FTX intends to settle the value of each client's claim in US dollars as of the bankruptcy date.


Court documents show that the reorganization plan will see FTX pay off creditors by selling off assets attached to various silos of the business. Additionally, the platform has not completely ruled out the option of restarting its offshore exchanges.


The process of paying creditors will be guided by three recovery pools. These groups include assets received from FTX US clients, assets received from FTX.com clients and assets not directly related to the exchanges.


The company considers most of its creditors as unsecured, which indicates that the company does not intend to fully compensate them. However, the company indicated that the proposed plan could still change. To ensure transparency of the process, the draft plan provides for seven categories of creditors to vote on the plan, including NFT holders, FTX US customers and FTX.com customers.

FTX CEO and President of Restructuring John R. According to Re III, the company intends to partner with clients in the coming months and also present a revised plan during the fourth quarter of the year as the plan is still in its early stages. However, it does provide an opportunity for amicable settlement of a significantly large and complex range of claims.


It remains to be seen how the process will proceed, particularly in terms of how FTX.com will be restructured or sold, the priority order of allocations to exchange default claims, and the overall creditor recovery estimate.


The draft Pay Creditors plan does not include any redemption plan for FTT tokens. The plan noted its "equity-like characteristics" and that bankruptcy reorganization plans in the United States usually eliminate the equity component.

The Remarkable Collapse Of An Exchange Giant

FTX was once a major cryptocurrency exchange, enjoying a status comparable to peers such as Coinbase and Binance. The company received overwhelming support and made huge promises. At an all-time high, the value of the FTT native token has exceeded $80 USD, with over 300 million in circulation. However, due to alleged suspicious transactions and allegations, the platform collapsed in November 2022, causing massive disruption to the cryptocurrency ecosystem.


The fall of FTX has led to increased regulatory oversight of digital assets in the United States and other countries around the world. According to the company's new management, which is currently overseeing the current draft of the creditors' payment plan, FTX.com owes its customers more than $8.5 billion.


More than $6.4 billion of the shortfall was in the form of stable coins and fiat currencies that were embezzled. Last month, FTX 2.0 launched an action against disgraced founder Sam Bankman-Fred and his team to recover some of the embezzled funds.

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