US Bankruptcy Court Approves FTX Asset Compensation Plan

Up to 94% of FTX's creditors, who account for $6.83 billion in claims, have agreed to the exchange's plan to repay the money.

According to the ruling issued on October 7 (US time), Judge John Dorsey of the Bankruptcy Court for the District of Delaware in the US agreed to approve FTX's asset compensation plan, with 98% of creditors and damaged users receiving up to 118% of the assets requested for repayment, as reported by Coin68 in May.

This plan also previously received the approval of up to 94% of FTX creditors and customers, who account for $6.83 billion in claims from the exchange.

However, there are still criticisms, specifically from Sunil Kavuri, representative of the FTX creditor group, who continues to oppose the plan. The reason is that FTX calculated the value of users' assets at the time of the bankruptcy in November 2022, then converted it into cash and paid to the victims. This is disadvantageous to investors because the prices of many cryptocurrencies have increased many times compared to the time FTX collapsed. Meanwhile, the value of assets that FTX reported to recover was calculated according to market value, causing a big misunderstanding that the exchange has recovered more than the amount of assets it had previously lost.

In addition, FTX creditors may also be taxed under US law if they receive compensation in cash, instead of crypto.

However, the court has not yet set a time frame for the asset repayment process to begin.

In addition, the plan to restart the FTX exchange, called "FTX 2.0" by the media, continues to hit a dead end when it cannot find any investors with enough resources for this project. In 2023, the bankruptcy trustee who took over FTX has repeatedly reached out to interested parties to reopen FTX, claiming that the exchange’s technology is good enough to resume operations and generate additional revenue.

Judge Dorsey also rejected the motions of parties involved in the FTX collapse, such as Celsius and LayerZero, and once again stressed that the FTT token is worthless.

Despite that, the price of the FTT token has increased sharply in recent days to $3.4, the highest price since January of this year.