Sam Bankman-Fried let go of control over FTX in the previous year. Almost 12 months later, the reorganized structure of the company has shown a positive sign of finally settling billions of dollars in debt. While it is unsure how and when the debts will be settled, management at FTX has said that they are in the final phase of their discussion.
Following a vote by creditors, US Bankruptcy Judge John Dorsey will give his final approval of what happens next. Per reports, most of the creditors in the Chapter 11 case agree with the plan that has been drafted.
A few factors raising uncertainties over the plan’s implementation are the valuation methodology for select digital tokens and expected returns for creditors. These factors will impact the manner and timing of funds reimbursement for affected customers and creditors. On the trading platform, these may be denominated in cash or cryptocurrency in order to qualify clients for rectification.
FTX is working to finalize bidders for FTX Trading Ltd. Once a leader in the industry, the crypto exchange platform is now navigating its way through several post-bankruptcy strategies. The platform could be up for a 100% sale or get saved with a valuable partnership.
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A year after being convicted of fraud, Sam Bankman-Fried is the subject of the sequence of events. This resulted in the bankruptcy filing, creditors lining up for their funds, customers battling for what was left in their accounts, and the company going through reorganization in the hopes of resuming its services.
The development comes days after FTX submitted the reorganization plan. It was tagged with a potential rally in FTT, the FTX token.
Simply put, the plan to reorganize and settle the debts with credits plus customers is linked to how far FTT moves up in the graph. The native was last seen exchanging hands at $3.48. This is a slip of 9.64% in the last 24 hours but a jump of 14.48% in the last 30 days. Notably, FTT has not benefited from the announcement that the settlement has reached its final stages. This may be due to continuing doubts regarding FTX’s ability to return funds in the manner in which it was initially intended.
The settlement of a billion-dollar default is subject to the liquidation of a substantial portion of the crypto holdings of FTX. The crypto community and investors have their sights set on how FTX finds a way to get out of trouble. Until then, bidders are entering the FTX ecosystem to take control of the exchange platform. There is still a possibility that a joint partnership may be reached to retain the platform.
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SBF has been found guilty, with the development dating back to last month. FTX management, however, continues to work to bring the company out of all the legal and debt-related trouble.
