The estate of the defunct crypto enterprise FTX has submitted a proposal to conclude bankruptcy proceedings with a Delaware court, as indicated by a filing from Saturday. The collapse of the exchange, founded by Sam Bankman-Fried, occurred in November 2022, shortly after CoinDesk reported on the unstable balance sheet of the firm’s trading unit, Alameda. The anticipated deadline for the bankruptcy plan was set for December 16, following prior informal proposals that outlined intentions to return up to 90% of creditors’ recovered funds.
maximize and efficiently distribute value to all creditors.
The Estate.
The latest proposal categorizes creditor and customer claims based on the priority the estate intends to assign to them. The valuation of claims will be determined by asset prices as of the date the company filed for bankruptcy. In a distinct statement, the estate clarified that the plan has been crafted to “maximize and efficiently distribute value to all creditors.”
As is common in other notable crypto bankruptcy cases, the plan is expected to encounter opposition from various creditor groups until it receives court approval. A hearing date for the plan is scheduled for 2024.
The reorganization plan has left several critical questions unanswered, such as whether FTX will relaunch its inactive crypto exchange, the methodology the company will employ to assess the value of certain digital tokens, and the anticipated recovery for creditors.
Before its decline, FTX held the position of the world’s second-largest crypto exchange and boasted an estimated valuation of $32 billion. Ray had previously cautioned customers and investors involved with FTX not to anticipate a complete recovery. Speaking before a congressional panel late last year, he stated, ‘We will never get all these assets back.’
Sam Bankman-Fried, the former CEO and co-founder of FTX, was convicted last month on seven federal charges of fraud and conspiracy related to the collapse of the exchange. He is set to face a second trial on additional charges in March.
