FTX creditors are gearing up to vote on a reorganization plan that could potentially expedite the repayment of lost funds. Recent court documents and an online call to vote indicate that creditors might soon see a return of their investments. This development comes as a relief to many who have been anxiously waiting for a resolution.
FTX Creditors To Vote On A Plan for Funds Recovery
The official committee of unsecured creditors of FTX has negotiated a comprehensive plan with debtors, culminating in a call to vote set for October 7. According to the released document, the debtors and the committee have reached an agreement on the payment plan, creditor claims, and distributions, finally setting the stage for a decisive vote. The outcome of this vote holds the potential to significantly accelerate the reimbursement process for creditors.
Recent court documents shared by self-proclaimed FTX creditor activist Sunil Kavuri suggest that FTX crypto holders might recover only 10-25% of their lost assets. The documents further disclose that FTX plans to transfer 18% of forfeited funds from the US Department of Justice into a specially designated “Preferred Shareholder Remission Fund.” This $230 million-capped fund is intended to compensate FTX’s preferred shareholders—those who held equity in the company before its collapse. While these shareholders stand to benefit, many FTX crypto holders are disheartened, as their expected recoveries are much lower.
Users Voice Their Frustration
In response to the announcement, users have expressed their frustration. One user commented, “Disgraceful, we have been scammed twice!” Kavuri also highlighted that repayments will be calculated based on the asset prices at the time of FTX’s bankruptcy filing. For instance, Bitcoin was priced at around $16,000 at the time, compared to its current value of $65,000, while Solana was valued at $17, a stark contrast to its current price of $160.
During the bankruptcy process, it was noted that the value of crypto assets has appreciated, allowing creditors to potentially be repaid on a dollarized basis. However, crypto traders have voiced their disagreement with the last-minute changes to the payback plan, expressing their concerns on social media platform X.
Conclusion
As FTX creditors prepare to cast their votes on the reorganization plan, the crypto community watches closely. The outcome could provide a much-needed resolution for many who have been waiting to recover their lost assets. However, the disparity in the expected recovery rates between preferred shareholders and regular crypto holders continues to fuel frustration and discontent. The coming days will reveal whether this plan can deliver the long-awaited relief to FTX creditors.
