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FTX files reorganisation plan to end bankruptcy

Monday 18 December 2023 15:16 CET | News

The estate of the collapsed crypto enterprise FTX has officially submitted a proposal to end bankruptcy in a court in the US. 

 

The collapse of the crypto exchange occurred in November 2022, coinciding closely with the disclosure of the unstable financial state of the firm's trading unit, Alameda. The bankruptcy plan was expected by December 16, 2023, following earlier informal proposals, which included plans to return up to 90% of creditors' funds.

The estate of the collapsed crypto enterprise FTX has officially submitted a proposal to end bankruptcy in a court in the US.

 

In the new proposal, creditor and customer claims are classed according to the priority the estate plans to give them, and the value of claims will be calculated based on asset prices as of the date the company filed for bankruptcy. In a separate statement, the estate said the plan was designed to maximise and efficiently distribute value to all creditors. In line with other crypto bankruptcy cases, the proposed plan is expected to encounter resistance from various creditor groups until it receives court approval. A hearing date for this matter is scheduled for 2024. 

Bankruptcy in the crypto space 

In February 2023, FTX Japan, the Japanese arm of bankrupt crypto exchange FTX resumed customer holding withdrawals through the Liquid Japan platform. Liquid Japan is a locally licensed cryptocurrency exchange that was acquired by FTX in April 2022. To be able to withdraw their assets from FTX Japan, users would need to open an account with Liquid Japan, assuming they don’t already have one. The Japanese subsidiary of FTX informed all eligible clients about the details of the procedure via email. In December 2022, the collapsed exchange revealed that it would allow its customers in Japan to withdraw their funds via Liquid Japan. However, the company did bring up the possibility of some delays in processing withdrawal requests due to a large number of requests from customers. 

Shortly after FTX filed for bankruptcy, US-based crypto lender BlockFi did the same due to a liquidity crisis caused by its proximity to FTX. BlockFi conducted business with FTX by issuing loans to crypto trading firm Alameda, and it also held cryptocurrencies on the exchange’s platform.  According to decrypt.com, BlockFi took a USD 400 million line of credit from FTX US in the summer of 2022, and it also received USD 850 million in two funding rounds in 2021. 

Source: Link


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Keywords: cryptocurrency, cryptocurrency exchange, digital assets, crypto
Categories: DeFi & Crypto & Web3
Companies: FTX
Countries: World
This article is part of category

DeFi & Crypto & Web3

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