FTX, a cryptocurrency exchange that recently filed for bankruptcy, has announced an ambitious repayment plan aimed at reimbursing its creditors and customers in full. The plan entails allocating billions of dollars to compensate for the time value of their investments, in addition to returning their principal amounts.

In a pivotal press release on May 7, FTX revealed that it intends to reimburse 98% of its customers with at least 118% of their allowed claims in cash. This proactive measure reflects the exchange’s commitment to restoring trust and delivering fair compensation to those impacted by its fraud scheme.

The reorganization strategy, submitted to the United States Bankruptcy Court of Delaware, encompasses a centralized distribution of assets acquired by FTX prior to its collapse in November 2022. The exchange has reported securing substantial funds, ranging from $14.5 billion to $16.3 billion, through the sale of various assets and properties.

Notably, FTX’s repayment strategy aims to address both governmental and non-governmental creditors. Non-governmental creditors are set to receive complete payments based on their claim values determined by the Bankruptcy Court, whereas a subordination arrangement has been proposed for governmental creditors. This arrangement facilitates prioritized interest payments to primary classes of customers and creditors at rates of up to 9%, ensuring timely execution.

Furthermore, the plan introduces a distinct category termed the “convenience class,” tailored to streamline the repayment process for creditors with claims valued at $50,000 or less. This targeted approach underscores FTX’s commitment to expediting compensation for smaller creditors.

While the amended repayment strategy is pending finalization and court approval, upon acceptance, creditors can expect to receive 118% of the value of their allowed claims within 60 days of the plan’s effective date. This signifies a significant step forward in the restoration of financial stability for FTX’s creditors and customers.

Disclaimer: The information provided in this research report is for informational purposes only and should not be interpreted as financial or investment advice. The NFT and cryptocurrency market is highly volatile, and readers should conduct thorough research before making any investment decisions.