Bankrupt FTX Exchange Gains Strong Support from Creditors for Reorganization Plan
On Aug. 21, the bankrupt crypto exchange FTX announced that its reorganization plan has received overwhelming support from creditors. According to FTX, over 95% of creditors have endorsed the plan, representing 99% of the claims by value. This widespread consensus among FTX creditors highlights the approval within the community.
FTX CEO John J. Ray III emphasized the significance of this support, stating, “Importantly, the Plan’s innovative structure provides for the return of 100% of bankruptcy claim amounts plus interest for non-governmental creditors and resolves complex disputes with dozens of governmental and private stakeholders.”
Despite some critics arguing that FTX’s valuation approach disadvantages creditors by using November 2022 prices, FTX remains confident in exceeding the acceptance thresholds required under the Bankruptcy Code due to the overwhelming support.
FTX plans to file the final voting results with the US Bankruptcy Court for the District of Delaware before the Confirmation Hearing scheduled for Oct. 7, 2024.
Former FTX Exec Files Action Against US Government
On the same day, former FTX executive Ryan Salame took legal action against the US government. He alleged that the US government reneged on their promise not to pursue campaign finance charges against his partner, Michelle Bond, a key element of his plea deal.
In a social media post on platform X, Salame stated, “It’s all true but I just made a court filing I’m pretty nervous about because I know it means the most powerful body in the world is going to come at me and my loved ones again, but I’m hoping it encourages more people to be honest and tell the truth and expose un-American tactics.”
Salame, along with other former FTX executives, had pleaded guilty to crimes related to their roles at the defunct exchange. Salame was set to begin serving a 7.5-year prison sentence on Oct. 13 and was ordered to pay over $6 million in forfeiture and more than $5 million in restitution.
