FTX Customers Buckle Up! $9B Shortfall Claim Payout Expected to Roll Out by Mid-2024

FTX Customers May Receive $9B Claim Payout by Mid-2024

Customers of bankrupt crypto exchange FTX and FTX US are in for a surprise! Get ready to party like it’s the second quarter of 2024, because there’s a proposed settlement that could return over 90% of their assets! That’s right, folks, it’s time to do the happy dance!

According to FTX debtors, they’ve reached a “major milestone” in their Chapter 11 case. After some intense discussions with creditors and even a class action plaintiffs committee, they’ve come up with a plan to resolve customer property disputes. Talk about turning things around!

The proposed settlement, which was filed with a Delaware-based United States Bankruptcy Court, includes a little something called the “Shortfall Claim.” And let me tell you, it’s a big claim. They estimate that customers of FTX.com and FTX US could collectively receive a whopping 90% of the assets available for distribution. That’s a whole lot of crypto dough!

So here’s the breakdown: FTX.com customers could be looking at around $8.9 billion, while FTX US customers may get their hands on about $166 million. That’s some serious moolah, my friends! If everything goes according to plan and the Bankruptcy Court gives its stamp of approval, these funds could be hitting bank accounts by the end of the second quarter of 2024. Time to mark your calendars!

Now, let’s hear it for John. J. Ray III, CEO and chief restructuring officer of FTX, who’s pretty darn pleased with the terms of the settlement. He said, “Together, starting in the most challenging financial disaster I have seen, the debtors and their creditors have created enormous value from a situation that easily could have been a near-total loss for customers.” Talk about turning lemons into lemonade!

But hold up, there’s more. The amended plan involves dividing the assets into three pools: one for FTX.com customers, one for US customers, and a general pool of other assets. However, the Shortfall Claim only includes the first two groups. Sorry, general pool, you didn’t make the cut!

Now, here’s the catch. FTX debtors anticipate that customers of both exchanges might not receive full payment, and FTX.com could see a larger percentage of losses. It’s like that old saying, “You win some, you lose some.” Just hope you’re on the winning side, folks!

Now, let’s talk about customer clawbacks. It’s kind of like getting a tasty treat, only to have a bite taken out of it. Customers who withdrew over $250,000 from the exchange within nine days of bankruptcy could see their claim reduced by 15% of the amount. Ouch! But don’t worry, if your claim is under $250,000, you’re in luck! No reduction for you. It’s a small victory in the grand scheme of things.

But wait, there’s a twist. As part of the amended plan, FTX may exclude insiders, affiliates, and customers who might have had knowledge of the commingling and misuse of customer deposits and corporate funds. What a plot twist! It’s like a crypto soap opera up in here.

And speaking of drama, former FTX CEO Sam Bankman-Fried is currently two weeks into his fraud trial related to FTX’s collapse to bankruptcy. Talk about being in the hot seat! Let’s hope he’s got a good lawyer and a solid defense.

So there you have it, folks. The exciting tale of FTX’s proposed settlement. Will customers get their assets back? Will the Bankruptcy Court give the thumbs up? Only time will tell. But in the meantime, keep your eyes on the crypto market and your fingers crossed. It’s a wild ride, but hey, that’s what keeps things interesting in the world of digital assets!

Now, my fellow investors, it’s time to hear from you. What are your thoughts on this proposed settlement? Are you feeling optimistic about getting your assets back? Or are you skeptical and keeping your expectations low? Share your comments below and let’s get the conversation started!

We will continue to update Blocking; if you have any questions or suggestions, please contact us!

Share:

Was this article helpful?

93 out of 132 found this helpful

Discover more

Bitcoin

BlackRock: Reshaping Bitcoin or Breaking It?

Learn from Arthur Hayes why the involvement of BlackRock in Bitcoin could pose a threat to the cryptocurrency's moral...

Opinion

The Battle of Choosing Locations for Transnational Cryptocurrency Companies (Part 1) Comparative Analysis of Taxation and Regulation between Singapore and Hong Kong

Singapore and Hong Kong have both established regulations and guidelines to regulate the development of the cryptocur...

Finance

Hong Kong's new encryption regulations come into effect: taking stock of the "first batch of pioneers"

Web3 has attracted the attention of integrated institutions, exchanges, project parties, and even traditional financi...

Blockchain

Hong Kong Regulator Gives the Thumbs-Up for Wider Retail Virtual Asset Investments With All the Necessary Safeguards in Place

Hong Kong financial regulators SFC and HKMA have issued guidelines for intermediaries on conducting virtual asset-rel...

Market

Why did the SEC reject the approval of a bitcoin ETF for spot trading? Will BlackRock's attempt be successful this time?

Asset management giant BlackRock will submit an application for a Bitcoin ETF (Exchange-Traded Fund) and use Coinbase...

Market

Future Web3 New Chapter: Triple Impact of VSAP on Exchanges, Financial Markets, and TradFi

With the rapid development of the virtual currency market, more and more people are investing in and trading virtual ...