A US bankruptcy court has officially approved crypto exchange FTX liquidation plan, paving the way for it to repay customers using $16 billion in recovered assets, according to Reuters, which reports that the ruling was made by Judge John Dorsey during a court hearing in Wilmington, Delaware, on Monday.
Court Approves FTX Settlements
The approved plan includes a series of settlements with FTX customers, creditors, US government agencies, and liquidators tasked with managing the company’s operations outside the United States.
These settlements prioritize the repayment of customers before addressing claims from government regulators, allowing FTX to utilize its assets effectively in the repayment process.
Under the approved plan, FTX customers will receive at least 118% of the value of their accounts as of November 2022, the month the failed crypto exchange filed for bankruptcy.
Customer Reactions Remain Mixed
According to Reuters, FTX has characterized this outcome as a triumph for its creditors, attributing it to the successful recovery of cash and crypto assets that had initially gone missing amid the chaos surrounding the company’s collapse.
Additionally, FTX has raised further funds by liquidating other assets, including its investments in various technology firms, such as the artificial intelligence (AI) startup Anthropic.
However, customer reactions to the repayment plan have been mixed. Many former users of the exchange have expressed disappointment, feeling that the collapse of FTX prevented them from taking advantage of a significant rebound in cryptocurrency prices since the market hit its lowest point in 2022.
Some customers have voiced objections to the plan, arguing for higher repayments that reflect the recent increases in crypto values. FTX has maintained that it cannot simply return the cryptocurrency assets originally deposited by customers, as those assets were misappropriated by founder Sam Bankman-Fried.
Bankman-Fried, who was sentenced to 25 years in prison in March for defrauding FTX customers, has since appealed his conviction, further complicating the aftermath of the exchange’s failure.
At the time of writing, the exchange’s native token, FTT, has jumped 20% to the $3 mark for the first time in nearly 8 months amid the first quarter of the year’s uptrend.
CoinGecko data also shows that FTT has seen a notable 176% increase in trading volume in the last few hours, but is still down nearly 97% from its all-time high of $84, reached in September 2021.
Featured image from DALL-E, chart from TradingView.com