FTX’s native token, FTT surged over 50% to $3.23 on Monday after the exchange received court approval for its bankruptcy plan. The plan allows FTX to repay customers in full using $16 billion in recovered assets, including interest. However, FTT later settled at around $2.72, as per CoinGecko data, after a 100% increase in value over the last two weeks leading up to the confirmation hearing.
On Monday, Judge John Dorsey of the U.S. Bankruptcy Court for the District of Delaware confirmed FTX’s Chapter 11 Plan of Reorganization, marking a near conclusion to the exchange’s bankruptcy saga almost two years after its collapse. Despite the approval, Judge Dorsey emphasized that the value of FTT remains zero, citing no evidence to suggest otherwise.
Under the restructuring plan, 98% of creditors will receive approximately 119% of their approved claims within 60 days of the plan’s implementation. The decision follows a favorable vote by 94% of creditors, representing around $6.83 billion in claims. The total recovered funds are estimated between $14.7 billion and $16.5 billion from various sources, including FTX’s liquidation, international branches, and government collaborations.
John J. Ray III, FTX’s CEO and Chief Restructuring Officer, praised the efforts of the team and global cooperation in recovering billions of dollars. The distribution of funds will span over 200 jurisdictions, with specialized agents ensuring efficient delivery. Though some opposed the cash distribution method, the court confirmed this approach during Monday’s session.
FTX’s collapse in November 2022 stemmed from the company’s misuse of customer funds for risky investments. Sam Bankman-Fried, the former CEO, was convicted of fraud and conspiracy, receiving a 25-year prison sentence. Last month, he filed an appeal against his conviction. Other FTX insiders, including Caroline Ellison, former CEO of Alameda Research, have also faced legal consequences. Ellison was sentenced to two years in prison and required to forfeit $11 billion for her role in the fraud.
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