FTX Files Plan to End Bankruptcy, Pay Crypto Creditors Billions

Steven Church, Bloomberg News

The FTX Cryptocurrency Derivatives Exchange logo on a laptop screen arranged in Riga, Latvia, Nov. 24, 2022. The implosion of Sam Bankman-Fried’s FTX empire dealt a harsh blow to the Bahamas’ ambitions to be a hub for the crypto industry, and it’s causing massive pain for locals who treated the now-bankrupt exchange like a bank. Photographer: Andrey Rudakov/Bloomberg , Bloomberg

(Bloomberg) -- FTX Trading Ltd. unveiled its latest proposal for returning billions of dollars to customers and creditors, kicking off a final round of potential squabbles about how best to end the bankruptcy case of the fraud-tainted crypto firm.

The reorganization plan left some of the most important questions unanswered, including whether FTX will restart its defunct crypto exchange, how the company will estimate the value of some digital tokens and how much creditors can expect to get back.

Next year, the plan will be sent to creditors for a vote — likely with key details added — before it goes to US Bankruptcy Judge John Dorsey for final approval. The major creditor and customer groups that have been involved in the Chapter 11 case have agreed to the broad outlines of the plan.

The payout plan calls for billions of dollars to be distributed as cash after much of the firm’s cryptocurrencies have been liquidated.

Last month, FTX founder Sam Bankman-Fried was convicted of orchestrating a massive fraud that led to the collapse of his FTX exchange.

The company filed for bankruptcy last year after Bankman-Fried agreed to turn over control of his empire to restructuring professionals. Since then, the advisers have been tracking down assets and trying to untangle a complex web of debt owed to various creditors, including customers who put cash and crypto on the trading platform.

The case is FTX Trading Ltd., 22-11068, U.S. Bankruptcy Court for the District of Delaware.