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Collapsed cryptocurrency exchange FTX is moving closer to resolution as a majority of its creditors have voted to approve the companyâs reorganization plan. According to a Monday filing by Kroll Restructuring Administration, over 94% of FTX Dotcom clients supported the plan, marking a critical step forward in the lengthy bankruptcy process.
The voting, which ended in August, revealed that nearly all classes of FTX creditors overwhelmingly voted to accept the plan. Two classes of creditors did not return their ballots, but these were presumed to approve the reorganization. This support paves the way for FTX to proceed with its proposed payout framework, though the full distribution of funds remains uncertain.
FTX Creditors to Recover at Least 118% of Claims
The filing shows that 94.48% of creditors in the âdotcom customer entitlement claimsâ classârepresenting claims worth approximately $6.83 billionâvoted in favor of the restructuring plan.
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Similarly, 89.1% of U.S. customer creditors, holding around $60.99 million in claims, also backed the plan. Another major group, the âdotcom convenience claimsâ class, saw an even higher approval rate, with 95.88% voting in favor, representing $223.59 million in claims.
Under the proposed reorganization, around 98% of FTXâs creditors will receive at least 118% of their claim value in cash, based on the value of the relevant cryptocurrencies at the time the claims were evaluated. Despite this, many creditors are bracing for a substantial haircut, with recent bankruptcy documents indicating they may only recover 10-25% of their cryptocurrency holdings.
October Confirmation Hearing Set
The next major milestone for the reorganization plan will be the confirmation hearing, scheduled for October 7. This will determine whether the court finalizes the plan, setting the path for payouts to begin.
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In a previous ruling, a New York judge authorized FTX and its sister company, Alameda Research, to repay up to $12.7 billion to creditors. While this figure sounds promising, the reality of what creditors can expect to recover remains bleak, especially in the context of volatile cryptocurrency markets.
Activist Sunil Kavuri, who has been closely following the case, noted that despite these approvals, FTX creditors face the âgrim realityâ of recovering only a fraction of their original assets.
