The bankrupt crypto exchange, FTX, has secured a major win by gaining court approval for its creditor repayment plan, affecting millions of investors left uncertain since its bankruptcy filing two years ago.

How the Repayment Plan Works

The plan prioritizes FTX's smaller customers with account balances of $50,000 or less. About 98% of customers are expected to see repayment. Judge John Dorsey called the case a 'model' for complex bankruptcy proceedings. Much of the plan's success came down to negotiations between FTX, creditors, customers, and regulators, assuring client repayments before FTX's obligations like tax debts and penalties are addressed. Notably, non-governmental creditors could receive up to 119% of their claim amounts.

The Aftermath of FTX's Collapse

FTX's collapse involved its founder, Sam Bankman-Fried, receiving a 25-year sentence for fraud, having used customer funds to bailout his hedge fund, Alameda Research. Despite the setbacks, FTX's new CEO, John Ray, noted the progress in recovering between $14.7 and $16.5 billion in distribute-ready assets.

What's Next for FTX Creditors?

With the plan now approved, customers could start seeing payouts within 60 days after the plan's official roll-out, which is yet to be announced. Many former FTX users have been waiting almost two years, marking this as a significant milestone, though it won't fully alleviate the stress and uncertainty they faced since FTX's crash. This case highlights the risks associated with crypto investments.

The approval of FTX's creditor repayment plan marks a crucial step for many awaiting to recover their investments, serving as a significant lesson on the risks of cryptocurrency investing for the entire market.