Coinspeaker
FTX Bankruptcy Plan Gains Overwhelming Creditor Support
The proposed reorganization plan by the restructuring administration of the collapsed crypto exchange FTX has gained massive support from creditors. According to a recent filing, over 94% of the voting creditors in the “dotcom customer entitlement claims” class have voted in favor of the plan.
The firm responsible for soliciting votes, Kroll Restructuring Administration, revealed that nearly all classes of creditors voted to accept the reorganization plan. Although the two classes did not return their votes, and they were presumed to have accepted the plan.
The filing revealed that 89.1% of the creditors that fall to the “US customer entitlement claims” class voted in favor of the plan; this class will be getting $60.99 million. Also, 95.88% of the creditors in the “dotcom convenience claims” class, representing $223.59 million in claims, also voted to approve the plan.
Based on the FTX bankruptcy plan, most of the creditors will receive at least 118% of their claims in cash, which is about $6.83 billion in claims in cash value. However, calculations for how much creditors are owed were made based on the market value of those cryptocurrencies when the claims were filed, not their current value.
The support creditors have shown FTX so far is a crucial step toward finding a solution to the crash that impacted the crypto industry. Their backing could potentially facilitate the plan’s approval, with the confirmation hearing scheduled for October 7th.
When revealing the massive support they had received after the completion of the voting in August, John J. Ray III, the CEO and Chief Restructuring Officer of FTX, stated that the innovative structure of the plan aims to fully reimburse non-governmental creditors, returning 100% of their claims plus interest, while also resolving complex disputes with both governmental and private entities. He revealed his optimism about progressing towards cash distribution for customers and completing the Chapter 11 bankruptcy process.
Potential Impact on Crypto Market Recovery
Some crypto experts believe that FTX’s compensation, which is about to occur, could improve the general crypto market in the bull run. Crypto on-chain analyst Ash Crypto listed the FTX compensation as part of what could trigger a bullish run in this fourth quarter.
Similarly, another crypto commentator, Lady of Crypto, with over 500,000 followers, stated that $16 billion is set to be distributed to crypto traders who missed buying opportunities during the market downturn blamed on the actions of Sam Bankman-Fried. Thus, she believes the influx of cash might spark one of the largest bull runs in cryptocurrency history.
With the confirmation hearing scheduled for six days from now, creditors and crypto experts will be closely watching the outcome. If the compensation proceeds smoothly, many traders may use the collected funds to buy more cryptocurrency, potentially boosting the market. However, some could have been affected psychologically because of how long the bankruptcy case took and instead withdrew from crypto.
