FTX Progresses Towards 90% Settlement for Creditors: Here’s the Timeline

After intensive investigations, it has been unveiled that a substantial amount of funds from FTX customer assets is missing. Consequently, FTX Trading Ltd and its associated debtors have united to propose a settlement that aims to return the majority of the lost crypto and financial assets to the affected customers.

FTX Customers on the Path to Recover Lost Assets

On Monday, October 16, FTX debtors reached a consensus to resolve their ongoing Chapter 11 court case known as the “Customer Shortfall Case.” The bankrupt crypto exchange has presented a settlement plan that is set to offer FTX customers over 90% of their missing assets, with the anticipated completion by the end of Q2 2024. The proposal includes a $9 billion reimbursement for FTX.com and an additional $166 million for FTX.US.

The official filing, scheduled for December 16, 2023, outlines the division of FTX debtors’ assets into three distinct categories. The first segment is designated for the benefit of FTX.com, the second for FTX.US, and the third functions as a general pool for any other assets.

In a statement released on FTX’s official X (formerly Twitter) account, the proposal is suggested to gain approval from the Bankruptcy Court, potentially providing a favorable resolution for victims of the crypto exchange’s failure.

The post reads, “If approved by the Bankruptcy Court, the settlement will create a special ‘Shortfall Claim’ to benefit customers, as previously proposed by the FTX Debtors in July, and facilitate an offer to eligible customers to settle customer preference exposure at an agreed amount.”

John J. Ray III, the Chief Executive Officer and Chief Restructuring Officer of the FTX Debtors, expressed his enthusiasm about the latest developments in the FTX case. He stated his delight in seeing those affected by the FTX debacle being compensated and acknowledged the vital role played by the independent Board of Directors overseeing the case.

He added, “Together, starting in the most challenging financial disaster I have seen, the debtors and their creditors have created enormous value from a situation that easily could have been a near-total loss for customers.”

FTX Executive Addresses Customer Missing Funds

Nishad Singh, an FTX Deputy and a key witness in the fraud trial of FTX founder Sam Bankman-Fried, has revealed in a New York court that he was aware of the billions of dollars in missing customer funds.

Singh disclosed that he had confronted Bankman-Fried regarding the alleged misappropriation of customer assets to Alameda Research, a crypto trading firm co-founded by Bankman-Fried. Singh voiced concerns about Bankman-Fried’s extravagant lifestyle and suggested that he was aware of discrepancies in the accounting of customer funds.

He informed the court that he had contemplated resigning from the crypto exchange but was persuaded by Sam Bankman-Fried to continue working and attempt to recover the missing customer funds.

Singh has pleaded guilty to fraud charges and is now cooperating with prosecutors in the Sam Bankman-Fried trial with the aim of receiving a reduced sentence. In contrast, Bankman-Fried has pleaded not guilty and is contesting his innocence in court.