FTX granted court approval to solicit votes on liquidation plan; some creditors continue to object

FTX has received approval from a US bankruptcy court to solicit votes on a liquidation plan that would pay customer claims in cash. However, some creditors continue to object to the plan, arguing that it does not adequately account for the increase in crypto prices since FTX’s collapse in November 2022. The plan would pay customers based on crypto prices at the time of the collapse, resulting in lower payouts compared to the current value of each cryptocurrency. FTX will accept votes on the plan until August 16 and seek final approval on October 7. FTX CEO John J. Ray III has stated that it is impossible to return the original amount of crypto deposited by customers due to the company’s shortfall. The company held only a small percentage of the Bitcoin and Ethereum shown in customer balances at the time of bankruptcy. Despite objections, past developments indicate that the majority of customers will gain access to their owed amounts within 60 days of the court approving FTX’s wind-down plans. FTX currently has $11.4 billion in assets, which could potentially increase to $12.6 billion by the end of October.