FTX, the cryptocurrency exchange that filed for bankruptcy in November 2022, has announced a new debt settlement plan aimed at repaying all creditors in full. The proposed plan, pending approval by a Delaware Bankruptcy Court, promises to pay 100% of allowable bankruptcy claims and interest to non-governmental creditors, a significant departure from previous plans that only covered asset value at the time of bankruptcy.

According to FTX CEO and Chief Restructuring Officer John J. Ray III, the improved financial outlook is attributed to the recent cryptocurrency market surge, which has seen Bitcoin appreciate over 200% since the bankruptcy. FTX has successfully gathered and liquidated assets worth $14.5 to $16.3 billion, which will be distributed among creditors.

Under the new plan, smaller creditors with claims under $50,000 may receive up to 118% of their claim amount, subject to court approval. This aims to favorably treat smaller creditors who were disproportionately affected by the bankruptcy. Payments will be made within 60 days of the plan taking effect, providing quick resolution for affected parties.

FTX has been actively recuperating funds through various means, including selling off investments, such as its $884 million stake in artificial intelligence company Anthropic. These efforts have been crucial in accumulating the necessary capital to pay off the proposed repayments.

The repayment plan prioritizes financial stability and creditor claims satisfaction, ensuring that FTX will not re-open as a cryptocurrency exchange. Instead, the focus will be on reorganization and compensating creditors for financial harm suffered. If accepted, this proposal will set a precedent for digital finance companies to operate responsibly during recovery periods, prioritizing restitution and accountability.