FTX clients could receive $9.2 billion by mid-2024

By mid-2024, FTX clients could receive payouts on claims against the exchange going through the bankruptcy proceedings in the amount of $9.2 billion. This follows from the plan approved by creditor representatives and the platform’s new management.

(4/4) All creditor representatives involved agreed to support a related amended Plan of Reorganization to be filed by 12/16/23: https://t.co/qAp9kxXNEP

— FTX (@FTX_Official) October 17, 2023

The parties reached an ‘important milestone’ after ‘expanded discussions’ about clients’ property disputes, according to the press release.

The agreements require court approval. Management must submit the corresponding application by December 16.

The platform’s users are set to receive a total of $8.9 billion, with its U.S. unit at $166 million.

The figures are equivalent to more than 90% of assets as of the end of Q2 2024.

‘By working together, from the worst financial catastrophe I have ever seen, debtors and creditors have extracted enormous value from the situation. It could have easily resulted in nearly complete losses for customers,’ said acting FTX chief John Ray.

The revised plan calls for dividing FTX’s assets into three pools:

• set aside for the benefit of FTX users;
• set aside for the benefit of FTX.US customers;
• a common pool of other assets.

The plan covers only the first two groups.

‘The core terms of the plan represent a compromise among the creditors’ committee, the debtors, the ad hoc customer committee and other representatives on a range of issues,’ the creditors’ committee said.

The Plan Term Sheet is a compromise between the Committee, the Debtors, the ad hoc customer committee and other representatives on a range of issues that balance the rights of customer and non-customer creditors across the U.S. and foreign debtors.

— Official Committee of Unsecured Creditors of FTX (@FTX_Committee) October 17, 2023

FTX may exclude from distributions any insiders, affiliated parties and customers who may have known about the commingling and improper use of deposits and corporate funds, according to the statement.

In October, within the FTX 2.0 coalition, officials did not rule out that a successful closing of a new funding round for Anthropic of at least $2 billion would lift the AI startup’s valuation to $20–30 billion and lay the groundwork for a 100% return of funds to FTX clients.

In a March presentation, the exchange’s representatives put the total shortfall to cover creditors’ claims at $8.7 billion, of which about $1.6 billion was in Bitcoin. In June 2023, the current platform management team said it would return liquid assets amounting to around $7 billion.

In May, FTX filed a lawsuit against Genesis seeking to recover $3.9 billion. Subsequently, the amount of claims was reduced to $2 billion. The companies agreed to pay $175 million to Alameda Research.

In July, lawyers demanded the return of $71 million from exchange-affiliated charitable entities.

As noted, in September a court approved Robinhood’s buyback of its 55 million shares worth $605.7 million, which had previously belonged to the platform’s founder, Sam Bankman-Fried.

In the same month, FTX filed a lawsuit against LayerZero seeking to recover $86 million.

Later the platform asserted claims against the Hong Kong branch’s employees for $157.3 million.