Those who are owed money from FTX can anticipate a recovery of only 10-25% of their cryptocurrency, as indicated by recently updated bankruptcy documents shared by FTX creditor Sunil Kavuri.
Prices from the petition date, when crypto values were substantially lower, will serve as the basis for reimbursements. For instance, the value of Bitcoin was approximately $16,000 at that time.
The decision has caused considerable frustration among FTX creditors, who are dissatisfied with the older prices that are being used to repay them. Kavuri emphasized that many creditors are still experiencing emotional distress as a result of the collapse, as their assets have not yet been returned. Others have expressed comparable apprehensions, characterizing the plan as deceptive and unjust, with some referring to it as a “second swindle.”
Kavuri also contended that Sam Bankman-Fried violated the terms of service of FTX by misusing customer funds to satisfy debts and purchase assets, including Robinhood shares. In order to satisfy its creditors, the FTX estate has reached an agreement to reclaim $600 million in shares from Bankman-Fried’s company, Emergent Technologies, earlier this month.
Other parties are also opposing the reorganization proposal. In August, a bankruptcy trustee in the United States expressed apprehension regarding the plan, contending that it provides an excessive amount of legal protection to the individuals responsible for overseeing FTX’s bankruptcy process. Additionally, the SEC has expressed potential concerns, particularly in the event that FTX elects to reimburse creditors with stablecoins.
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