FTX’s administrators have published their reorganisational plan to repay customers and creditors who lost over $8 billion when the cryptocurrency exchange collapsed in November 2022.
Since taking over the defunct exchange, an administration team led by John J Ray III has embarked on the unenviable task of recovering the billions of dollars of stolen funds which ultimately led to the imprisonment of FTX founder Sam Bankman-Fried.
According to the latest court documents, the debtors have already dollarised $1.8 billion worth of recovered digital assets.
Plans are underway to sell recovered shares in Grayscale and Bitwise investment trusts, according to the reorganisation plan, though an estimated dollar figure on the shares was not disclosed.
“The debtors submit that confirmation of the plan will maximise and efficiently distribute value to all creditors while fairly and equitably addressing the debtors’ liabilities,” read the filing.
Yet not all creditors are expected to receive the full sum of funds outstanding, and the plan is subject to a vote from certain creditors.
The taxman is first in line for repayment, followed by holders of priority, secured and ‘separate subsidiary claims’ before customers get a cut.
According to the plan, the Income Revenue Service (IRS) has proof of claims of approximately $24 billion, which could effectively chew out the entire sum of recovered funds.
“The debtors believe that the IRS’s claims jeopardise plan confirmation,” said the administrators, adding: “The debtors understand that the IRS plans to examine their
tax returns at its ordinary pace- potentially over the course of years.
“Given the magnitude of the IRS claims, plan confirmation would be delayed until the IRS concludes its examination. Moreover, the IRS has not at this time agreed to subordinate its claims.”
There are also questions over how much the administrators are pocketing from the bankruptcy proceedings.
In August, various reports claimed as much as $1.5 million a day was going to lawyers and other professionals, though the true figure is unclear.