The post FTX Saga Continues: Debtors to Update on Proposed Settlement appeared on BitcoinEthereumNews.com.

The FTX Debtors have provided an update regarding the proposed settlement with preferred shareholders, as part of their Chapter 11 bankruptcy proceedings initiated in November 2022. This settlement aims to return 100% of the assets under FTX’s control to creditors. The U.S. Department of Justice (DOJ) currently oversees the distribution of assets forfeited through criminal cases related to cryptocurrency exchange’s collapse and has classified preferred shareholders as victims alongside creditors.  (1/3) The FTX Debtors are providing an update on the proposed settlement with the preferred shareholders. FTX will be returning 100% of the assets under FTX’s control to creditors in the Ch. 11 plan. The DOJ is in control of the distribution of assets forfeited through the… — FTX (@FTX_Official) September 30, 2024 This development comes amid on-going scrutiny of the cryptocurrency exchange operations and the fallout from its founder Sam Backman-Fried’s fraudulent activities, which led to one of the largest collapses in cryptocurrency history. Backman-Fried was convicted of fraud related crimes in November 2023, further complicating the space for creditors seeking recovery. FTX’s Novel Approach The crux of the matter lies in the competing claims between cryptocurrency exchange and the preferred shareholder regarding the forfeiture proceeds. The DOJ will ultimately decide how to reconcile these claims. In a novel approach, cryptocurrency exchange is requesting the DOJ to agree to a centralized distribution process through its Chapter 11 plan, which would expedite asset distribution to creditors and minimize expenses associated with prolonged legal disputes.  In June 2024, the global cryptocurrency exchange filed a disclosure statement detailing the DOJ forfeiture process and related assets, providing creditors with critical information on how their claims will be handled. The bankruptcy court has also been involved in establishing a valuation method for cryptocurrency claims, highlighting the complexities associated with digital asset valuation in bankruptcy…

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Filed under: News - @ October 1, 2024 12:26 pm