A U.S. bankruptcy judge has approved the reorganization plan for FTX, the collapsed cryptocurrency exchange, allowing for the repayment of a majority of its users. In a decision made on October 7, Judge John Dorsey of the Delaware Bankruptcy Court authorized FTX’s plan to liquidate its assets and repay its creditors. The plan is expected to return roughly 119% of claimed account values to 98% of users—marking a significant step forward in the lengthy bankruptcy proceedings that began in 2022.

John J. Ray III, FTX’s CEO and chief restructuring officer, expressed optimism, stating that this will be the largest bankruptcy asset distribution in history. However, not everyone is convinced. Critics of the plan argue that it fails to account for gains in cryptocurrency values since FTX’s collapse in 2022. One vocal critic, FTX creditor Sunil Kavuri, argued that users may only receive 10–25% of the value of their crypto holdings.

FTX’s bankruptcy filing came when Bitcoin was worth $16,000. At the time of publication, Bitcoin has surged past $63,000, leaving many users frustrated at the potential loss in value. Meanwhile, several FTX executives, including former CEO Sam Bankman-Fried, have been sentenced to prison for their roles in the company’s downfall.

While the court has approved the plan, it remains unclear when users will actually see their funds. Market watchers are bracing for potential ripples in the crypto space when these repayments start, similar to the impact of the Mt. Gox disbursements earlier in 2024.

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