Bankrupt cryptocurrency exchange FTX announced on August 21 that its reorganization plan has received strong preliminary approval from creditors.

According to FTX , over 95% of creditors have endorsed the plan, representing 99% of the claims by value. This significant support indicates widespread agreement among FTX creditors.

FTX CEO John J. Ray III highlighted the importance of this support, emphasizing that it reflects the plan’s widespread acceptance within the community. He stated:

“The plan’s unique structure is significant as it allows for the full return of bankruptcy claim amounts, including interest, to non-governmental creditors. Additionally, it successfully resolves complex disputes with various governmental and private stakeholders.”

Despite this support, some critics argue that FTX's approach disadvantages creditors by valuing assets based on their November 2022 prices—when the firm declared bankruptcy—rather than current market values.

FTX is confident that the overwhelming support received will ensure the plan surpasses the necessary acceptance requirements outlined in the Bankruptcy Code.

FTX has announced that they will submit the final voting outcomes to the US Bankruptcy Court in Delaware before the Confirmation Hearing, which is scheduled for October 7, 2024.

Former FTX exec petitions US

The community backing for the FTX plan comes as a former executive of the exchange, Ryan Salame, takes legal action against the US government.

On August 21, Salame claimed that the US government broke their promise not to pursue campaign finance charges against his partner, Michelle Bond, which was a crucial part of his plea deal.

On the social media platform X, he stated that his lawsuit was intended to “tell the truth and expose un-American tactics.” He added :

“Everything is true, but I just filed a legal document, and I’m pretty nervous about it because I know the most powerful entity in the world will target me and my loved ones again. However, I hope it encourages more people to be honest, speak the truth, and expose unethical tactics.”

Salame, along with other former FTX executives, including Alameda CEO Caroline Ellison , Nishad Singh , and Gary Wang, had admitted guilt to various crimes connected to their roles at the defunct exchange.

Salame was set to begin serving a 7.5-year prison sentence on October 13. He was also required to pay over $6 million in forfeiture and more than $5 million in restitution.