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FTX Bankruptcy Repayment Plan Update
The FTX bankruptcy estate has outlined its target to initiate repayments to customers by the end of 2024, as disclosed during a meeting of FTX Digital’s Joint Official Liquidators in the Bahamas.
Collaboration Between Entities
The FTX bankruptcy consists of two distinct processes, including the Chapter 11 bankruptcy being overseen by a Delaware court in the United States and the official liquidation of FTX Digital, the Bahamas-based subsidiary of FTX. Both entities have agreed to collaborate, allowing creditors to submit their claims to either party while ensuring that no creditor receives less than their entitled value.
Repayment Timeline
According to the meeting notes from March 15, both the Chapter 11 Debtors and the Joint Official Liquidators aim to make the first interim distribution to creditors with admitted claims and satisfactory Know Your Customer (KYC) documentation by the end of 2024.
Creditors’ Claims Submission
- Creditors have been able to submit their claims through FTX’s claims portal since March 1.
- The current deadline for choosing one of the two bankruptcy processes and submitting a claim is set for May 15.
- The deadline is expected to be extended to at least June 2024 based on recent developments.
Valuation of Claims
Similar to the Chapter 11 claims, the Bahamian claims will be valued as of the initial bankruptcy claim date on November 11, 2022.
FTX Financial Moves
Last week, FTX agreed to sell the majority of its shares in AI startup Anthropic for $884 million in a bid to pay back creditors. In 2021, FTX and its sister firm Alameda invested $500m in the AI firm, holding a 7.84% stake. The subsequent surge in the artificial intelligence sector, driven in part by the popularity of ChatGPT, led to a doubling in the value of these shares.
Anthropic has secured significant funding, totaling around $7b, from major tech players like Amazon, Alphabet, and Salesforce.
Legal Developments
Sam Bankman-Fried, the founder of now-collapsed crypto exchange FTX, has been sentenced to 25 years in prison about five months after he was found guilty on all seven counts related to fraud and money laundering during his trial.
While there is no possibility of parole in federal criminal cases, Bankman-Fried can still shave time off his 25-year sentence with good behavior.
Ian is a cryptocurrency enthusiast blending humor with professionalism. With an engineering background and a storyteller's heart, he simplifies the blockchain world with sharp analysis and a touch of wit. At Cryptowire, he brings his unique perspective to make digital financial innovation accessible to all.
