The FTX estate floats an amended proposal to return up to 90% of creditor holdings, divided into three pools, and plans to formally file the plan by December 16

An amended proposal released early Tuesday will be filed by the FTX Debtors by mid-December if approved.

CoinDesk 2023-10-17 Shaurya Malwa

Context & Ripple Effects

FTX’s estate had already moved from early asset recovery toward a creditor-voting framework, with an earlier draft repayment plan proposing cash-settled claims and the elimination of FTT. The amended proposal adds a more defined distribution structure to that process.

The proposal also comes after FTX’s lawyers said they had recovered $7.3 billion in liquid assets, while considering whether creditor holdings could support a restart. That makes the allocation of recovered value—not just recovery itself—the central bankruptcy question.

First-order effects

Creditors get a clearer potential recovery path: up to 90% of holdings, allocated across three pools, subject to approval and the planned December filing.
The FTX Debtors must turn the outline into a formal plan and secure the approvals needed to execute distributions.

Second-order effects

Pool design can determine which creditor groups recover on different terms, concentrating negotiation and voting pressure on claim classification and valuation.
A formal repayment path narrows the room for a restart strategy built around creditor assets, even as FTX was weighing bids to restart trading.

Third-order effects

If approved, the case would reinforce a settlement-and-distribution model in which a failed exchange’s remaining assets are converted into structured creditor recoveries rather than restored as an operating platform.
The complexity of allocating claims across pools highlights how weak records and controls can make exchange failures costly to unwind, with outcomes shaped as much by bankruptcy design as by asset recovery.

The trend: Crypto insolvencies are increasingly being resolved through court-supervised recovery pools that prioritize claim settlement over reviving failed trading venues.

Discussion

@ftx_official @ftx_official on x
(3/4) If approved by the Bankruptcy Court, the settlement will create a special “Shortfall Claim” to benefit customers, as previously proposed by the FTX Debtors in July, and facilitate an offer to eligible customers to settle customer preference exposure at an agreed amount.
@napgener @napgener on x
90% of the FTX estate payout amounts will be returned by end of Q2 2024. taht means novogratz selling is going to be HUGE and ASAP 🧸🎯 [image]
@timccopeland Tim Copeland on x
But if we get paid in fiat does this become a bullish recovery And counteracts mt gox
@sunil_trades Sunil on x
Preference = net withdrawals* 9 day period (2 Nov) Settlement regards only preference 1) If have a claim (No withdrawals): claim not impacted 2) 15% settlement of preference netted against your claim 3) If withdraw + no claim = pay 15% of withdrawal 4) Less $250K no impact [image…
@wassielawyer @wassielawyer on x
Sound like FTX clawbacks against customers that withdrew over 250k within last 9 days only - can be settled at 15%. Pretty good news for both people with preference exposure and FTX claims tbh, implies a fairly high recovery rate for FTX claimants. https://www.prnewswire.com/...
@spreekaway @spreekaway on x
On FTX customer clawbacks: Debtors offer settlement of 15% of net withdrawals within 9 days of bankruptcy filing, [image]
@ftx_official @ftx_official on x
(2/4) After extensive discussions with the Ad Hoc Committee of Non-US Customers, the Unsecured Creditors Committee and class action plaintiffs, the FTX Debtors have reached a proposed settlement of the customer property disputes.
@colegarnerstake Cole Garner on x
“FTX Settlement is Announced” Nope. Just the most hilarious word salad ever. I read it, so you wouldn't have to. Read this and you're guaranteed to lose IQ points. https://www.prnewswire.com/...
@zackdabrams Zack Abrams on x
What to make of Nishad's morals? That's for the defense to decide. (Or not! They might simply ask a bunch of confusing questions and then excuse Singh like they did Cary and Gary ¯\_(ツ)_/¯)
@autismcapital @autismcapital on x
Obligatory Nishad Singh courtroom sketch from the FTX Sam Bankman-Fried trial. [image]
@wublockchain Wu Blockchain on x
Nishad Singh, FTX's former director of engineering and third largest shareholder: - Acquired Celsius, Voyager, BlockFi, in part to bail out the space and in part to make Alameda have access to more funds to borrow. - FTX never implemented liquidations. If a customer was...
@cohenluc Luc Cohen on x
“I was a straw donor.” Nishad Singh testified at Sam Bankman-Fried's trial yesterday that the money he donated to U.S. political campaigns could only have come from FTX customer funds. He'll be back on the stand for cross-examination today. https://www.reuters.com/...
@tiffanyfong_ Tiffany Fong on x
SBF Trial: Nishad Singh's Testimony was wilder than I expected. [video]
@lidiajeankott Lidia Jean Kott on x
Nishad Singh testified that he felt like he had spent “five years of blood, sweat and tears, working toward something I thought was good that turned out to be evil.” Out of three top executives we've heard from, he seemed to me to be the angriest at Sam Bankman-Fried.
@innercitypress @innercitypress on x
Today Nishad Singh testified that Ryan Salame accessed his bank account to give money to the Delaware Democratic Party... Also that the recipients knew that Singh was not the real donor... https://twitter.com/...
@teddyschleifer Teddy Schleifer on x
The Sam Bankman-Fried trial right now is getting into the nitty gritty of campaign finance. As Nishad Singh is on the stand, people referenced recently include Gabe Bankman-Fried, Keenan Lantz and the “Donation Processing” Signal chat that has appeared in DOJ indictments.
@jayshams @jayshams on x
incredible day at the SBF trial. NISHAD SINGH: Sam, I don't know if I can do this. Every day of keeping this fraud a secret tears up my insides. We need to sell all our assets to make customers whole. SBF: thjinking about givinng michael jordan $100mil. u think ok?>
@leomschwartz Leo Schwartz on x
Nishad Singh detailed the FTX straw donor scheme today: -Gabe Bankman-Fried's Guarding Against Pandemics would message a group chat requesting a donation in Singh's name -Ryan Salame had access to Singh's bank account and would wire the funds -Singh would click the confirm email
@zackdabrams Zack Abrams on x
At the trial, Nishad Singh was on the stand when he read from a list of celebrity names. When asked about Kris and Kendall Jenner, he testified “I honestly couldn't tell you what they do” 😭
@teddyschleifer Teddy Schleifer on x
Here is my story from ealier this year with the backstory to the donation from Nishad Singh to the LGBTQ Victory Fund — a check meant to boost @BeccaBalintVT in Vermont. https://puck.news/...
r/technology r on reddit
Sam Bankman-Fried's legal peril deepens as his defense comes up short

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