In a significant development, FTX, the crypto exchange founded by Sam Bankman-Fried, has revealed its creditor-repayment plan in an effort to settle customer claims with cash. This move comes after the company filed for bankruptcy in November 2022, facing a precarious financial situation. Moreover, FTX has proposed to restart FTX.com, making its services available to international customers once again.
According to a Bloomberg report, FTX has taken proactive steps to address customer complaints as part of its bankruptcy resolution. The company filed for Chapter 11 bankruptcy protection in the US Court last year, just as it was on the brink of collapse. Federal prosecutors had already initiated investigations into the platform’s activities months prior to its bankruptcy filing.
The innovative approach taken by FTX involves selling its native token, FTT, to generate funds for reimbursing customer debts. The recovery pools guiding the repayment scheme include assets associated with both FTX.com and FTX US customers, as well as assets not entirely tied to any specific customers
John J. Ray III, Chief Restructuring Officer at FTX, emphasized that the creditor-repayment plan is still in its early stages, inviting seven classes of creditors to vote, after which an amended plan will be introduced. He expressed satisfaction with filing the plan relatively early in the process.
FTX has categorized its creditors into various classes to facilitate the exchange’s relaunch with the involvement of third-party investors. The first and second classes consist of FTX.com customers and FTX US customers, respectively. Other parties included in the classification are customers of FTX’s NFT exchange, unsecured claims, secured claims, and subordinated claims.
While the repayment plan revolves around the sale of FTT tokens, the class structuring does not currently offer any benefits to FTT holders. Nevertheless, the creditor-repayment plan represents a constructive approach to reach a global settlement and compromise on an extensive and complex array of claims.
FTX’s effort to settle its customer claims and its potential relaunch signal the company’s determination to overcome its financial challenges and regain stability in the cryptocurrency market. As FTX progresses with its bankruptcy resolution, investors and customers will closely monitor the developments, hoping for a successful restructuring that could potentially bring the exchange back to full operation.