Will FTX Re-Start Operations After Exiting Bankruptcy? Creditors To Vote On Proposal

In its final move to end the bankruptcy case, FTX has taken a step forward to launch a yet-to-be-approved proposal for returning money to creditors.

What Happened: FTX Trading (CRYPTO: FTT) looks to end its bankruptcy case by launching a proposal to return significant money to customers and creditors in cash amid the majority of the firm’s cryptocurrencies being liquidated, as stated in the exchange’s official filing.

The assets will be valued in cash based on value at the time of bankruptcy filing from Nov. 11, 2022. They will be given priority based on how the exchange plans to rate them. It remains unknown how the creditors will receive the proceeds.

With additional details attached, the plan will be initially sent to the creditors for an approval vote. Later it will be sent to the U.S. Bankruptcy Judge John Dorsey for final approval.

Meanwhile, the involved major creditor and customer groups have given their green signal to broader outlines of the plan.

However, the plan did not specify details on whether FTX will resume operations of the exchange, how it will estimate the value of some digital tokens, and how much creditors can expect to get back.

Why It Matters: The advisers to the FTX bankruptcy plan have been working on tracing the assets and solving the debt scenarios of the exchange to many creditors, which include all customers who put cash and crypto on the trading platform.

A recent FTX filing, as indicated by the co-founder and CTO of CashHODL on his X platform, indicates the pile of legal costs that are hoarding over the claims of creditors and customers.

The bankruptcy firm led by CEO John J. Ray III had originally announced to file its bankruptcy plan by Dec.16, 2023, to a U.S. Bankruptcy Court for perusal.

In other moves, FTX was allowed to offload around $873 million worth of assets that it held in trust. Also, it has already started to offload its subsidiaries and sell its crypto derivatives subsidiary LedgerX for $50 million in early 2023.

Read Next: FTX Challenges IRS's $24B Tax Demand, Asserts Zero Liability In Court Filing

Image: Shutterstock