The bankrupt cryptocurrency exchange FTX has made progress in resolving customer property disputes by reaching a proposed settlement with key creditors. Their goal is to settle ongoing litigation and establish a revised payout plan, potentially finalizing it in the second quarter of the next year.
This achievement, known as the “Customer Shortfall Settlement,” involves various parties, including FTX debtors, non-U.S. customer representatives, unsecured creditors, and class representatives.
If approved by the bankruptcy court, the settlement will create a “Shortfall Claim” for eligible customers to resolve their exposure to customer preferences. The estimated shortfall claim amounts to around $8.9 billion for FTX.com and $166 million for FTX US.
Customers may receive over 90% of the distributable value worldwide if the amended plan, which incorporates the settlement, gains approval by the end of the second quarter in 2024.
However, there may still be some losses for customers, particularly those using FTX.com. The official committee of unsecured creditors noted that the amended plan will expedite Chapter 11 proceedings and the timeline for creditor and customer recoveries, though significant work remains to be done.
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