FTX Seeks Creditors' Preference for Cash or Crypto Payouts

• FTX creditors can choose cash or crypto payout at market value.
• Judge approved voting plan for creditors on June 25.
• Creditors dissatisfied with proposed 118% cash return plan.
• Vote aims to gather feedback from FTX customers.
• Creditors have until Aug. 16 to vote on the plan.
• FTX has recovered $11.4 billion in cash, expects $12.6 billion by Oct. 31.

Summary :
FTX has received court approval to ask its creditors whether they would prefer to receive their recovered funds in cash or in crypto at the current market value. The voting plan was approved by Judge John Dorsey of the US Bankruptcy Court for the District of Delaware. Many FTX creditors are seeking a payout in crypto, taking into account the significant increase in the crypto market's value since FTX's collapse. The purpose of the vote is to gather feedback from FTX customers who have not been involved in the repayment negotiations. However, FTX lawyers emphasized that bankruptcy laws require the firm to value claims based on the time of filing for Chapter 11. The proposed cash repayment plan would be easier to implement and would not subject creditors to capital gain tax. Creditors have until August 16 to vote on the plan, and the court will decide whether to approve it on October 7. FTX has recovered $11.4 billion in cash so far, with expectations that the amount will rise to $12.6 billion by October 31. FTX was once one of the largest cryptocurrency exchanges before its collapse in 2022, with approximately $8 billion misappropriated from customers. The former CEO, Sam Bankman-Fried, has been convicted on fraud and money laundering charges and sentenced to 25 years in prison.

Sources :

- CoinTelegraph