FTX creditors only getting 10-25% of their crypto back Creditor
Following the collapse of the FTX exchange, the FTT token collapsed by more than 80% and wiped away over $2 billion in customer value.
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Following the collapse of the FTX exchange, the FTT token collapsed by more than 80% and wiped away over $2 billion in customer value.
The regulator said that while stablecoin-denominated creditor repayments may not be illegal, it reserves its rights to challenge transactions involving crypto assets.
The objections raised by the US trustee and the creditor group are likely to play a significant role in the courts deliberations.
In a significant development for the cryptocurrency industry, FTX, the exchange that collapsed in November 2022 under the leadership of convicted Sam Bankman-Fried, is preparing to distribute a staggering $16 billion in cash to its customers, which could lead to significant gains for Bitcoin (BTC) and Solana (SOL) prices. Crypto researcher Xremlin has predicted that [...]
The post Colossal Buying Pressure For Bitcoin And Solana As FTX Plans $16B Distribution, Expert appeared first on Crypto Breaking News.
Ronaldo is an experienced crypto enthusiast dedicated to the nascent and ever-evolving industry. With over five years of extensive research and unwavering dedication, he has cultivated a profound interest in the world of cryptocurrencies. Ronaldo’s journey began with a spark of curiosity, which soon transformed into a deep passion for understanding the intricacies of this [...]
The post FTX Seeks Customer Consensus: Multi-Billion Dollar Compensation Plan Goes To Vote appeared first on Crypto Breaking News.
In a significant development, defunct cryptocurrency exchange FTX has unveiled a reorganization plan to reimburse almost all of its customers. The announcement has sparked a substantial surge in the exchange’s native token, FTT, which recorded an uptrend of 52% over the past seven days, reaching a monthly high of $2.29 during Wednesday’s early trading session. FTX Unveils Debt Repayment Strategy FTX estimates its outstanding debts to creditors to be approximately $11.2 billion, as revealed in the reorganization plan published late Tuesday. The company has disclosed that it possesses between $14.5 billion and $16.3 billion, which it intends to distribute among the creditors. Under the proposed plan, customers with $50,000 or less claims will receive approximately 118% of the allowed claim amount. This compensation is slated to be disbursed to around 98% of the creditors, relieving FTX customers who have experienced locked funds since the exchange filed for bankruptcy protection in November 2022. Related Reading: Bitcoin Suffers Massive Outflows Amid Crypto Market Uncertainty, Tops $284 Million FTX stated in a press release on Wednesday that the company could not utilize the appreciation of the missing tokens during the Chapter 11 cases. Instead, FTX had to identify other recoverable sources of value to repay creditors. Following the departure of founder Sam Bankman-Fried, FTX appointed John Ray III as CEO. Ray, speaking on the matter in November 2022, expressed his astonishment at the “complete failure of corporate controls and such a complete absence of trustworthy financial information” witnessed at FTX. Ray further stated in the press release on Wednesday: 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. FTX’s founder, Sam Bankman-Fried, faced legal consequences, being convicted on seven criminal counts, including charges related to embezzling billions of dollars from FTX’s customers. Bankman-Fried was subsequently sentenced to 25 years in prison. FTT Bulls Eyeing $2.55 For Potential Breakout Continuation As of the latest update, the price of FTT has corrected to $2.050 after reaching its monthly high. This breakout occurred after consolidation between the $1.17 and $1.48 levels. At the current price level, FTT faces a significant resistance at $2.169, which has led to the ongoing correction. If FTT sustains its bullish momentum, the next resistance level to watch is $2.55 in the token’s daily chart. A successful breakthrough of this level could potentially lead to a retest of the $3 mark, which has not been revisited since January. Related Reading: Forget The Price Dip: Ethereum Network Activity Hints At Imminent Takeoff On the other hand, if the price experiences a further correction, FTT bulls should closely monitor the $1.95 and $1.765 levels, as they serve as crucial support levels. It is essential to prevent a loss of the gains achieved over the past month, which amounts to an 18% increase during this period. Featured image from Shutterstock, chart from TradingView.com
After two years of bankruptcy hearings, FTX creditor reimbursements are set to begin, but the FTX estate remains embroiled in litigation.
The long-awaited resolution for nearly $16 billion in funds owed to users and customers of the defunct crypto exchange FTX is approaching, as the estate managing the recovery process has outlined the next steps and timeline for distribution. FTX Nears Completion Of Chapter 11 Plan In Thursday’s announcement, FTX confirmed that it is nearing the completion of the final prerequisites necessary for its Court-approved Chapter 11 Plan of Reorganization to take effect, marking a significant milestone toward initiating creditor and customer distributions. John J. Ray III, Chief Executive Officer and Chief Restructuring Officer of the FTX Debtors, expressed optimism about the upcoming distributions, saying that they will begin distributing proceeds in “early 2025”. Ray emphasized that the timeline reflects the diligent efforts of the team working on behalf of FTX’s creditors and customers, who have reportedly recovered billions of dollars to date. He reassured stakeholders that the team is committed to maximizing recoveries and is actively working to finalize arrangements with distribution agents to expedite the return of funds. Related Reading: Bitcoin Price Almost Hits $98,000: Key Reasons Behind The Rally FTX provided updates on the anticipated timeline for these distributions. In early December, the estate expects to finalize agreements with specialized distribution agents tasked with facilitating the global distribution of recoveries to customers in supported jurisdictions. At that time, FTX will provide detailed instructions for affected customers on how to establish an approved account with these agents through the existing customer portal. What Customers Must Know By the end of December, FTX plans to announce the exact effective date for the distributions, contingent upon a Court Order that will approve the Disputed Claims Reserve Amounta necessary step outlined in the Confirmation Order. The current expectation is for the Plan to be effective in early January 2025. Following this, the first distribution will be made to holders of allowed claims in the Plan’s Convenience Classes within 60 days. Importantly, the distribution record date will coincide with the effective date, meaning customers will need to be prepared to act swiftly. For customers to qualify for the initial distribution, they must establish an approved account with a distribution agent and complete Know Your Customer (KYC) verification, along with submitting the required tax forms before the distribution record date. Additionally, claims traders should be aware of specific provisions in the Plan regarding trades made within 45 days prior to the distribution record date. Claims traded during this period may not be reflected on the claims register by the end of business on the distribution record date, which could result in distributions being made to the original claim holders rather than the current traders. FTT Price Reacts To Distribution Announcement At the time of writing, FTX’s native token, FTT, is trading at $2.36, reflecting a substantial surge of nearly 10% within the past 24 hours. Over a longer time frame, the token has posted impressive gains, rising around 40% over the past fourteen days and 18% over the past thirty days, in line with the broader market rally following President-elect Donald Trump’s victory on 5 November. Related Reading: Whale Alert: $2 Million PEPE Purchase Sees 105 Billion Tokens Snapped Up Data from CoinGecko further indicates that FTT has experienced a significant rise in trading volume over the past 48 hours, which has surged by 38%, resulting in over $135 million traded during this period. However, it is important to note that FTT’s current price remains significantly below its all-time high of $84, reached during the bull market of September 2021, marking a decline of over 97% from its peak value. Featured image from DALL-E, chart from TradingView.com
A US bankruptcy court has officially approved crypto exchange FTX liquidation plan, paving the way for it to repay customers using $16 billion in recovered assets, according to Reuters, which reports that the ruling was made by Judge John Dorsey during a court hearing in Wilmington, Delaware, on Monday. Court Approves FTX Settlements The approved plan includes a series of settlements with FTX customers, creditors, US government agencies, and liquidators tasked with managing the companys operations outside the United States. Related Reading: Heres Where We Are In The Bitcoin Bull Cycle According To The Wall Street Cheat Sheet These settlements prioritize the repayment of customers before addressing claims from government regulators, allowing FTX to utilize its assets effectively in the repayment process. Under the approved plan, FTX customers will receive at least 118% of the value of their accounts as of November 2022, the month the failed crypto exchange filed for bankruptcy. Customer Reactions Remain Mixed According to Reuters, FTX has characterized this outcome as a triumph for its creditors, attributing it to the successful recovery of cash and crypto assets that had initially gone missing amid the chaos surrounding the companys collapse. Additionally, FTX has raised further funds by liquidating other assets, including its investments in various technology firms, such as the artificial intelligence (AI) startup Anthropic. Related Reading: Dogecoin Analyst Expects A Multi-Year Bullish Breakout 200% Surge Potential However, customer reactions to the repayment plan have been mixed. Many former users of the exchange have expressed disappointment, feeling that the collapse of FTX prevented them from taking advantage of a significant rebound in cryptocurrency prices since the market hit its lowest point in 2022. Some customers have voiced objections to the plan, arguing for higher repayments that reflect the recent increases in crypto values. FTX has maintained that it cannot simply return the cryptocurrency assets originally deposited by customers, as those assets were misappropriated by founder Sam Bankman-Fried. Bankman-Fried, who was sentenced to 25 years in prison in March for defrauding FTX customers, has since appealed his conviction, further complicating the aftermath of the exchanges failure. At the time of writing, the exchange’s native token, FTT, has jumped 20% to the $3 mark for the first time in nearly 8 months amid the first quarter of the year’s uptrend. CoinGecko data also shows that FTT has seen a notable 176% increase in trading volume in the last few hours, but is still down nearly 97% from its all-time high of $84, reached in September 2021. Featured image from DALL-E, chart from TradingView.com
On Monday, a US bankruptcy court officially approved the liquidation plan for cryptocurrency exchange FTX, allowing the company to repay its customers using approximately $16 billion in recovered assets. This decision comes at a critical time for the crypto market, as creditors are poised to receive more than $12 billion through the court-sanctioned payout plan, [...]
The post FTX Bankruptcy: Key Dates For The $16 Billion Payout And Potential Market Effects appeared first on Crypto Breaking News.
A significant portion of FTX repayments will likely be reinvested into cryptocurrencies, thanks to the promising growth prospect of the crypto market for 2025, industry insiders told Cointelegraph.
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