The new reorganization plan must first be approved by a Delaware bankruptcy court. Bankrupt cryptocurrency exchange FTX has proposed a new reorganization plan that would see a whopping 98% of its creditors get back 118% of their claims – in cash – within 60 days of court approval, according to new documents filed Tuesday evening.

Details of the New Plan

Under the plan, other non-governmental creditors would get back 100% of their claims plus up to 9% interest to compensate them “for the time value of their investments.” The arrangement is still subject to approval by the Delaware bankruptcy court overseeing the bankruptcy case. The proposed payouts are higher than earlier estimates from the FTX estate, which said in October it expected to pay back only 90% of customer funds. In January, current FTX CEO John Jay Ray III revised that estimate, telling the court he expected to be able to pay customers back in full.

Financial Overview of FTX Estate

As previously disclosed, FTX.com had a massive shortfall at the time of the Chapter 11 filing in November 2022 – holding only 0.1% of the Bitcoin and only 1.2% of the Ethereum customers believed it held. Accordingly, Debtors have not been able to benefit from the appreciation of these missing tokens during these Chapter 11 cases. Other sources of value, including investments made by FTX and Alameda Research – such as its 8% stake in AI startup Anthropic, which was sold piecemeal to institutional investors for $884 million in March – have been liquidated to generate cash to pay back the claims.

Key Stakeholders and Their Agreements

FTX’s new reorganization plan would also settle a host of claims from regulators and government agencies, including the Internal Revenue Service (IRS) and U.S. Commodity Futures Trading Commission (CFTC). The IRS agreed to resolve its $24 billion in claims in return for a $200 million cash payment and a $685 million subordinated claim that will only be paid out after all creditors and other governmental entities. The CFTC and other unnamed governmental claimants agreed to subordinate their claims as long as FTX users and investors were paid in full with interest. There are also plans for a special fund created to make “supplemental restitution” to certain customers and creditors, though the details of this agreement have not been finalized, according to the press release.

The Role of Market Dynamics

Though the crypto market has rebounded since FTX’s collapse and subsequent bankruptcy – irking many of FTX’s customers, who have missed out on the opportunity to profit from the run-up in crypto prices while their funds are stuck in bankruptcy limbo – the estate denies that the market recovery is the driving force behind its massive pile of cash.