FTX’s reorganisation plan receives overwhelming creditor support

FTX (CRYPTO:FTT), the bankrupt crypto trading platform, has announced that its revised reorganisation plan has received significant support from its creditors.

According to FTX, over 95% of creditors who voted have backed the plan, representing 99% of the claims by value.

This substantial support is crucial as FTX aims to meet the approval thresholds set by the US bankruptcy code.

John Ray III, FTX’s chief restructuring officer and CEO, highlighted that the plan ensures a 100% return plus interest for non-governmental creditors.

This, he noted, demonstrates the robust backing of the plan from creditors.

The final vote results will be filed with the bankruptcy court before the confirmation hearing scheduled for October 7.

The reorganisation plan has garnered praise for its structure, which addresses complex disputes with various stakeholders and promises to resolve outstanding issues effectively.

However, some objections have arisen from FTX customers.

Activist Sunil Kavuri and other creditors have voiced concerns over the valuation of crypto holdings in the plan, arguing that cash reimbursements could lead to tax liabilities and undermine creditors’ property rights.

Kavuri, who has been actively involved in representing FTX customers, claimed that the plan violates creditors’ property rights by not returning the coins as they were.

This objection reflects ongoing tensions between FTX and its customer base regarding the handling of assets in the bankruptcy proceedings.

FTX initially filed for bankruptcy on November 2, 2022, when the global crypto market capitalisation was $840 billion.

The market has since surged to $2.1 trillion, marking a 161% increase in value.

This growth underscores the dynamic nature of the crypto industry amid ongoing bankruptcy proceedings.

At the time of reporting, the FTX (FTT) price was $1.47.