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FTX Files Amended Bankruptcy Plan To Pay Back Creditors 

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FTX Files Amended Bankruptcy Plan To Pay Back Creditors 
Source: Pinterest

FTX Files Amended Bankruptcy Plan To Pay Back Creditors 

Source: Pinterest

The world-famous crypto company FTX has made a huge turnaround. The company has filed an amended bankruptcy plan that hopes to pay back most of its creditors. 

FTX

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FTX Trading Ltd., popularly known as FTX, is a cryptocurrency exchange and trading company. It was founded in 2019 by Sam Bankman-Fried and Gary Wang but has a current CEO, John J. Ray III. The company previously operated a fraud-ridden cryptocurrency exchange and hedge fund until it eventually collapsed in November 2022. Therefore, the company filed for bankruptcy after it was proven that they were misusing their customers’ funds. 

The Company's Statement

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In a huge turnaround, the company released a statement saying it would be able to pay off many of its former creditors in full. The statement continued, saying that the plan is to pay all non-governmental creditors in full, based on the value of their assets, as the relevant bankruptcy court has rightfully stated. 

9% Consensus Rate

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On the other hand, the governmental creditors will also be paid, but the plan will only allow interest payments up to an agreed-upon consensus rate. The statement explained that the company has an arrangement with governmental creditors that will enable them to pay up to a 9% consensus rate from the beginning of the Chapter 11 bankruptcy cases. 

Awaiting Approval

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While this is only in its planning stage, the company still needs the approval of a U.S. court of law before it can be accepted. This would be a major breakthrough for the affected parties if they get the green light. They would not need to start their own legal battles with the company, and they would get their funds back easily. 

ALSO READ: “Corruption Has Become Normalized!” RFK Jr. Fumes as U.S. Drops Charges Against Crypto Poster Boy

Creditors Will Get Paid

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The statement also explained when the creditors will receive their pay. It says that 98% of the company’s creditors will get at least 118% of their claims in cash with long 60 days of effectiveness. Furthermore, the other FTX creditors will get 100% of their claims with some billions in compensation for the time value of their documented investments. 

The Special Convenience Class

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FTX put the 98% group of creditors in a special class to resolve all the claims faster. The statement says they are under a special convenience class to make it easier to pay them. If the Bankruptcy Court approves FTX’s plan, the creditors will have nothing to worry about considering getting their monetary claims back within 60 days.

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The Fall of FTX

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The rise and fall of FTX were shocking, to say the least. When the cryptocurrency brand crashed, it left a huge impact on the crypto world. In fact, the effects are still being felt to this day. In October 2023, Reuters reported that even Bitcoin was still feeling the impact of FTX’s crash, as it lost 65% of its value since 2022. However, experts predict a slow bounce back soon. 

The Former FTX CEO

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While on trial, former FTX CEO Sam Bankman-Fried was found guilty of seven counts of conspiracy and fraud. According to legal documents, he was involved in an elaborate scheme to defraud the company’s lenders and steal billions from customers’ accounts. Earlier this year, in March, a court sentenced Bankman-Fried to a lengthy 25 years in prison. 

ALSO READ: “I’m Haunted!” Former Crypto Boss Sam Bankman-Fried Says Amid Conviction

How Can They Pay Back?

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Many people wonder how the company that filed for bankruptcy in 2022 now has funds to clear huge debts. According to sources, this is possible because the company was able to recover a great amount of assets. The company forecasts that the total value of the recovered assets will be converted to cash and ready for distribution at a whopping sum of $14.5 and &16.3 billion. 

 

The New CEO

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FTX needed a new leader after everything that happened with Bankman-Fried. Therefore, the company gained a new CEO in the person of John J. Ray III. When he took over the company, he was utterly shocked by the level of dysfunction in FTX. He said that he had never seen such an absence of trustworthy finances and a huge failure of corporate controls. 

Ray’s Mission

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The statement also notes that the CEO was happy and determined to help the company. Ray said in a statement that he was positive that FTX still has the ability to deliver. Therefore, he hopes to help the company get back on its good foot and return 100% of non-governmental creditors back to them with interest. 

The Future of the Company

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The question many people have on their minds is, “Can FTX rebuild trust with its customers?” The bankruptcy court has not yet approved the proposal, and it will be considered at a hearing on June 25. As there is a high chance of returning all the money people lost before, FTX has a shot and might be able to build its customer base once again. 

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