- New Funds and Possible Repayments
- Current Situation and BlockFi Bankruptcy
- FTX: Reorganization Plan and Payments
BlockFi has gained $250M in USDC through Coinbase Prime, bringing their on-chain holdings to $300M. This raises questions if creditor repayments will start soon.
New Funds and Possible Repayments
Earlier in July, BlockFi announced plans to return 100% of claims from distressed clients. US-based creditors will be the first to get payback, while international creditors will have to wait longer due to Bermuda's regulatory requirements.
Current Situation and BlockFi Bankruptcy
BlockFi filed for Chapter 11 bankruptcy on November 28, 2022, after the collapse of FTX. They paused withdrawals just before filing, citing uncertainty around FTX’s finances. Since then, they’ve been trying to recover assets and sort out claims from their clients. Final payouts are expected within 90 days, so victims could see their money by late December. International clients might have to wait longer because Bermuda’s regulations require extra identity checks before funds can be released.
FTX: Reorganization Plan and Payments
Meanwhile, FTX is actively working towards a liquidation plan to repay its customers. Reportedly, the company has recovered around $16 billion that can be used for repayment. A court hearing is scheduled for October 7th where the Bankruptcy Court for the District of Delaware will consider the proposed Plan of Reorganization. If approved, the plan will allow FTX to repay over 98% of its customers and unsecured creditors in full, with interest. Customers are expected to receive about 118% of their claims in cash, calculated using a fixed bitcoin price of $16,871 at the time of bankruptcy. Some customers are unhappy with the repayment structure because Bitcoin’s value has increased by nearly $40,000 since the collapse. FTX's management has explained that they cannot favor one creditor over another without jeopardizing fairness across all claims. The upcoming court hearings on October 22, November 20, and December 12 will further explore how claims will be categorized and processed for repayment. If the court confirms the reorganization plan, payments could start before the end of the year.
In light of recent events, BlockFi might begin creditor repayments after acquiring $250M in USDC through Coinbase Prime. FTX's reorganization and repayment plans are also progressing, with potential payments starting by the end of the year. Further developments are expected in the upcoming months.
