A Delaware judge approved the FTX bankruptcy plan for cash repayment to customers, marking a significant step toward resolving the exchange's financial troubles.

Approval of FTX Bankruptcy Plan

The FTX bankruptcy plan could see up to $16 billion in recovered assets distributed to FTX creditors. Judge John Dorsey of the U.S. District of Delaware Bankruptcy Court approved it on October 7. The approval comes two years after the cryptocurrency exchange went bust, affecting thousands of customers across the globe. According to the plan, 94% of claimants had supported it, and 98% of creditors are set to receive 118% of their claims in cash. Not everyone supported the option to get some money repaid in cryptocurrencies, particularly in the native token of the exchange, as this plan was denied by Judge Dorsey due to the token's devalued status.

Sam Bankman-Fried's Sentence Appeal

The settlement effectively ends the mounting cases against FTX bankruptcy, once the leading centralized crypto exchange that imploded in 2022. It emerged that its founder, Sam Bankman-Fried, along with other executives, siphoned customer funds and presented deceptive financial statements. In response, users and U.S. authorities leveled fraud allegations. Within days of the Chapter 11 filing, Bankman-Fried and several of FTX's top executives were arrested. In a rapid trial, Bankman-Fried was convicted and sentenced to 25 years in prison. He has filed an appeal citing judicial bias.

Significance of the Court's Decision

The court's approval of the bankruptcy plan marks a significant step in resolving the financial issues stemming from FTX’s collapse. Despite controversies over cryptocurrency repayments, the decision provides stability and assurance for creditors.

The court's decision on cash payouts in the FTX bankruptcy plan offers creditors a realistic prospect of compensation, closing a chapter on one of the most dramatic cryptocurrency exchange collapses.