A federal bankruptcy judge ruled on Monday that nearly all creditors of bankrupt cryptocurrency company FTX would eventually make money from the money they put into the exchange.
Nearly two years after FTX fell into bankruptcy, a Delaware judge has approved the company’s reorganization plan, which involves paying more than $14 billion to customers of the failed cryptocurrency exchange.
“Going forward, we are prepared to return 100% of the bankruptcy claims plus interest to non-governmental creditors through the largest and most complex bankruptcy estate asset distribution in history,” said John Ray, who succeeded FTX as CEO. The company filed for bankruptcy at the end of 2022, in a statement on Monday.
Wray, who also led Enron through bankruptcy, added that the estate was working to finalize arrangements for distributions to creditors around the world.
The company said it has collected properties worth $14.7 billion to $16.5 billion for distribution. FTX previously estimated that it owed creditors approximately $11.2 billion.
Under the plan approved by Delaware Bankruptcy Judge John Dorsey, 98% of FTX creditors will receive 119% of their allowed claims by the time the exchange files for bankruptcy protection in November 2022.
The price is Bitcoin Since FTX’s collapse, its stock price has risen approximately 260%. FTX raised funds through the sale of a number of assets, including venture capital investments held by the exchange and other investments held by Bankman-Fried’s crypto hedge fund Alameda Research.
One of FTX’s most high-profile investments was in artificial intelligence startup Anthropic, which is backed by Amazon. FTX sold a majority stake in Anthropic this year for nearly $900 million.
The bankruptcy estate said it will make a separate announcement on the effective date of the payment plan and when distributions are expected to begin.
FTX founder Sam Bankman-Fried was found guilty in November of seven criminal counts, including charges related to stealing billions of dollars from FTX customers. He was sentenced to 25 years in prison.
— CNBC’s Dan Mangan contributed to this report.
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