Cryptocurrency exchange FTX is seeking to complete the bankruptcy process and has presented a proposal for "returning billions of dollars to clients and creditors." The plan includes considering the possibility of relaunching the exchange in 2024.
Next year, this plan will be subject to a vote by creditors, possibly with additional details, before it is presented to US bankruptcy judge John Dorsey for final approval. Major creditor and client groups involved in the Chapter 11 process have agreed on the key aspects of this plan.
It is important to note that last month, FTX founder Sam Bankman-Fried was found guilty of orchestrating a massive fraudulent scheme that led to the collapse of his cryptocurrency exchange FTX.
FTX cryptocurrency exchange was allowed to sell trust assets for approximately $873 million. The proceeds will be used to settle debts with creditors affected by the exchange's collapse in 2022.
Last year, the company filed for bankruptcy after Bankman-Fried agreed to hand over control of his company to professional restructuring experts.
Since then, consultants have been actively working on tracking assets and unraveling complex debt relationships with various creditors, including clients who had funds and cryptocurrency on the trading platform.
While US authorities plan to seize funds from victims of the cryptocurrency company's activities if the judge does not reject the government's claim of unpaid taxes totaling $24 billion.
The parties will appear in court to discuss the best procedures for determining the legality of the IRS claims. FTX seeks an expedited assessment of these claims, while the IRS claims that the audit is ongoing and cautions against assessing the amount of FTX tax liabilities until it is completed.
The cryptocurrency exchange has presented a payout plan aimed at distributing billions of dollars among creditors and clients who lost funds. However, before this plan can be implemented, the dispute with the IRS must be resolved, as stated in FTX's statement. The company has asked bankruptcy judge John Dorsey to hold a hearing in February 2024 to resolve the tax dispute.
Federal officials will ultimately amend the lawsuit for $24 billion to reclassify at least some of it as unsecured debts with lower priority. According to court documents, FTX administrators have currently returned around $7 billion in assets, including $3.4 billion in cryptocurrency.
