The collapsed crypto exchange FTX has taken a big step forward in its bankruptcy process, with over 94% of its "Dotcom" creditors voting in favor of a reorganisation plan. These creditors, primarily clients of the offshore FTX.com exchange, represent approximately USD $6.8 billion in claims.
The plan, spearheaded by restructuring agent Kroll, promises to return 118% of claims in cash to most creditors - a rare offer in bankruptcy cases, where returns are rarely above or even close to 100%. The approval is a significant milestone for the company, which filed for bankruptcy following its dramatic collapse in 2022. Almost all creditor classes supported the plan, while two creditor groups didn’t return ballots but are presumed to accept.
A hearing to confirm the plan is set for 7 October in the US Bankruptcy Court. However, potential hurdles remain. The US Securities and Exchange Commission (SEC) has previously raised concerns about using stablecoins for repayments (document filing number 24028). Whether these objections will influence the court’s decision remains to be seen.
The reorganisation plan has been widely backed by Dotcom customers, with 94% of ballots cast in favor. US creditors were slightly less supportive, with 89% voting yes on claims totaling USD $60.99 million. Other creditors, like those with smaller Dotcom convenience claims, showed overwhelming approval, with nearly 96% backing the plan.
While the plan offers some hope for FTX’s battered customers, the situation underscores the broader risks tied to the crypto industry’s regulatory challenges. As the 7 October court date approaches, all eyes are on the SEC and the bankruptcy judge’s final decision. If confirmed, the reorganisation plan could offer a win for FTX creditors—many of whom were left in financial limbo when the exchange imploded in late 2022.
Written by Luke Higgins and Steven Pettigrove
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