FTX Receives Court Approval to Solicit Creditor Votes on Liquidation Plan

FTX has received court approval to solicit creditor votes on a liquidation plan aimed at repaying customers in cash, based on cryptocurrency prices at the time of its November 2022 bankruptcy. The plan proposes paying 119%-143% of the assets as of the bankruptcy filing date and has recovered $16 billion in assets. Some customers argue that the plan undervalues their claims due to recent surges in crypto prices. The court’s approval came despite objections from creditors who feel misled about their recovery extent. FTX CEO John Ray stated that returning the original cryptocurrency is impossible due to mismanagement and theft by former CEO Sam Bankman-Fried. Creditors have until mid-August to vote, with final approval potentially coming in October.