FTX Proposes 118% Return to Creditors

The collapsed exchange FTX has proposed a new compensation plan, under which 98% of creditors will receive at least 118% of their claims within 60 days of court approval.

The remaining platform clients will receive 100% reimbursement of funds.

“The plan will allow disputes with public and private stakeholders to be resolved without costly and protracted litigation,” the press release states.

FTX forecasts the total value of compensations to range from $14.5 billion to $16.3 billion. This sum includes assets under the control of the exchange itself and its liquidators.

The company was able to secure such a volume of funds through the realization of “an extremely diverse set of cryptocurrencies, most of which were proprietary investments by Alameda or FTX Ventures.”

In late April, FTX conducted a sale of Solana below market price. The company sold 1.8 million SOL at a rate of about $100.

Following the previous auction, the exchange’s administrators sold coins worth ~$1.9 billion at a 62% discount (25-30 million SOL at $64), causing outrage among creditors.

The plan provides for full payment to all non-government creditors based on the value of their claims as determined by the court, as well as a subordination agreement with government creditors, which will allow debt to be paid at a rate of 9%.

FTX’s proposal includes several agreements and deals, including with the US Internal Revenue Service, the Department of Justice, the CFTC, and other regulators.

Hearings to discuss the plan are scheduled for June.

In March, FTX founder Sam Bankman-Fried was sentenced to 25 years in prison. His lawyers have appealed the decision.