FTX is making significant strides in its restructuring process.
The company is considering implementing a plan to pay primary creditors by the end of May. Court records indicate that $11.4 billion in cash has been raised during the bankruptcy proceedings.
FTX Payments Set for May 30
According to the process initiated in the Delaware court, FTX plans to begin payments to primary creditors on May 30. The cash reserves collected will be utilized to fund payments to hundreds or even thousands of affected parties. This situation signals a detailed evaluation of post-bankruptcy restructuring efforts.
Entities and individuals holding crypto assets on the FTX platform are among the primary creditors. Small claimants have already started receiving payments for claims under $50,000. This indicates that increasing claims during the bankruptcy process have emerged as a structural feature.
FTX Refunds
One of the major issues faced during the payment process is the presence of thousands of claims. Investigations have revealed that some claims are duplicated or invalid. The company’s efforts to streamline its financial statements also entail the elimination and verification of these claims.
Andrew Dietderich: FTX reported receiving 27 sextillion in claims. Some claims are either duplicated or unverified.
Legal creditors are entitled to demand an annual interest rate of 9% on unpaid claims. The application of interest rates could increase the financial burden on the company if there are delays in payments. This situation may potentially exert additional pressure during the payment process.
Among creditors, different expectations regarding asset refunds have emerged. Many claimants hope to receive their pre-bankruptcy assets back in crypto form, while payments will be made in dollars. This discrepancy is seen as a significant variable affecting the payment process. For some altcoins, dollar payments might be advantageous following recent major declines, but this is not the case for BTC and certain altcoins. Additionally, there is curiosity about whether payments to large creditors will trigger a new wave of increases in cryptocurrencies.
FTX’s payment plan is being closely monitored for the effective management of cash reserves and the mitigation of risks related to interest burdens in the post-bankruptcy restructuring process. The company’s efforts to clarify claims may contribute to reducing the grievances of claimants in the future.