FTX, the collapsed crypto exchange, has received court approval for its bankruptcy plan, which will allow it to repay billions to customers. U.S. Bankruptcy Judge John Dorsey approved the plan, enabling FTX to use up to $16.5 billion in recovered assets to repay customers. The wind-down plan prioritises customer repayment over other claims, following settlements with various agencies and creditors.

98% of Customers to Be Paid Back

FTX aims to repay 98% of its customers—those with $50,000 or less on the exchange—within 60 days of the plan’s effective date, which remains undetermined. These customers will receive at least 118% of their account value as of November 2022, when FTX filed for bankruptcy.

Asset Recovery and Challenges

FTX has recovered between $14.7 billion and $16.5 billion in assets, partly by selling stakes in tech companies like AI startup Anthropic. However, only 0.1% of the bitcoin customers believed they held on FTX was available during the bankruptcy, as founder Sam Bankman-Fried had misappropriated funds to cover risky investments by his hedge fund, Alameda Research.

Mixed Reactions from Customers

While the repayment plan has been hailed as a success, some customers are disappointed, particularly those who held cryptocurrency on FTX. With bitcoin prices having surged since 2022, some feel short-changed by FTX’s use of lower historic prices to calculate repayments. It has argued that returning crypto assets is impossible, as those funds were misused by Bankman-Fried, who is currently serving a 25-year prison sentence.

The approval of the bankruptcy plan marks a significant step forward for FTX’s former customers, although not all are satisfied with the outcome.