FTX Plans $6 Billion Distribution to Affected Users After Strong Creditor Support

Following an extensive review of the reorganization strategy, the troubled cryptocurrency exchange FTX has announced plans to allocate $6 billion to affected users, specifically targeting those impacted by its 2022 collapse.

This plan, which has garnered approval from an ad hoc committee, aims to provide relief to those who suffered losses during the firm’s downfall.

Support from creditors has been notably strong, with 94% of those voting from the “dot com customer entitlement claims” class endorsing the proposal. Out of 66 committee members, all voted in favor, marking a significant advancement toward asset distribution for FTX creditors.

Kroll Restructuring Administration, responsible for overseeing the voting process, reported overwhelming support across nearly all creditor categories. The two classes that did not vote are presumed supportive, leading analysts to suggest that the confirmation hearing set for October 7 may simply be a procedural formality.

Analyst Tom Dunleavy anticipates that distributions could begin within 4 to 8 weeks, aiming for completion by year’s end for all registered claims. Reports indicate that repayments will start following three upcoming hearings on October 22, November 20, and December 12.

For allocations, 89.1% of those with “US customer entitlement claims” are set to receive approximately $60.99 million, while 95.88% of creditors in the “dotcom convenience claims” category will obtain about $223.59 million. Most creditors are expected to recover at least 118% of their claims in cash.

However, it’s important to note that these figures are based on the cryptocurrency values at the time of claim submission, which means creditors may incur losses due to fluctuations in market prices since then.