Creditors of the bankrupt cryptocurrency exchange FTX are pushing forward with a liquidation plan that aims to repay clients in cash within a few months. The request to allow creditors to vote on the best liquidation plan has been granted by a US court, despite earlier objections that claimed a reduction in asset payments.
John Dorsey, the bankruptcy judge, overruled the opposing creditors and approved the voting plan documents. Attorney Andy Dietderich, representing FTX, described the stages leading up to this point as a massive team effort. The insolvent company has liquidated its holdings in real estate, venture capital, and other IT companies, managing to recoup around $16 billion to settle its debts after its demise and bankruptcy, with $12 billion in cash intended to be used to pay clients with interest.
However, several creditors argue that the claim of “full recovery” is unjust, as it is far lower than the existing values due to the disparity in cryptocurrency prices between 2022 and the present. FTX’s collapse in November 2022 caused massive losses in the market, as it was the second-largest crypto exchange at the time. This led to a domino effect in crypto regulation and market sentiment due to the billions of dollars in losses.
Many FTX creditors challenge the idea of a liquidation plan, pointing to the disparity in cryptocurrency prices as the reason why they will receive less than market value. In today’s highlighted crypto news, Solana bulls strive to maintain upward momentum amidst platform upgrades.
