FTX Restructuring Plan Receives Massive Support from Dotcom Creditors

• FTX’s restructuring plan receives support from 94% of the Dotcom creditors.
• The plan provides a 118% cash recovery for creditors representing $6.83 billion in claims.
• The firm awaits approval from the bankruptcy court as the hearing is set for October 7.

The bankrupt crypto exchange FTX’s restructuring plan has received overwhelming support from FTX.com offshore clients (Dotcom creditors). According to the Kroll Restructuring Administration, 94% of Dotcom creditors voted in favor of the reorganization plan. The plan intends to provide a 118% cash recovery for creditors representing $6.83 billion in claims.

In a filing submitted on Monday, Kroll disclosed that nearly all classes of creditors voted to “accept” the restructuring plan. About 89.1% of creditors in the US customer entitlement claims class expressed their support. They represent about $60.99 million in claims. Nearly 96% of creditors in the “dotcom convenience claims” class, with claims totaling $223.59 million, backed the plan. Though two classes of creditors did not return ballots, they assumed to be on board with the plan.

As the creditors approved the reorganization plan, FTX awaits a green light from the bankruptcy court. The confirmation hearing is scheduled for October 7. Challenges still linger, notably the SEC’s opposition to using stablecoins to reimburse creditors.

FTX’s Restructuring Plan

In May 2024, FTX filed its reorganization plan in the US Bankruptcy Court for the District Court of Delaware. The exchange’s plan included the “centralized distribution” of funds to affected users. As per the plan, the total amount available for the distribution lies between $14.5 and $16.3 billion.

In August, at the end of voting, FTX announced overbearing preliminary support from all creditor classes. More than 95% of FTX US and FTX Dotcom customers submitted votes to favor the plan.

Investors’ Dissatisfaction with 10-25% Return

Recently, FTX investors expressed dissatisfaction with the 10-25% return from the $16 billion distribution. They were concerned that the returns were based on Bitcoin’s price at the time of the FTX collapse. While BTC traded at around $16k during FTX’s fall, the token is valued at around $64,000 at press time. This made many investors believe that the exchange was defrauding them twice.

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