FTX managers unveil new plan to pay creditors

It is proposed to estimate the amount of claims according to the cryptocurrency exchange rates at the time of bankruptcy

18.12.2023 - 08:20

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FTX managers have unveiled a new payment plan to the clients of the bankrupt crypto exchange. It assumes the return of funds in cash after the liquidation of digital assets under the control of the company. The amount of claims is proposed to be assessed at the rates of cryptocurrencies at the time of the bankruptcy filing on November 11 last year. However, since then, the exchange rates of most assets have doubled or more, which means multi-million dollar losses for users. For example, at the time of FTX’s collapse, bitcoin was trading at around $17 500, while the current rate at the time of writing is $41 050. Hence, the loss to creditors will be ~$23 550 per BTC.

Press release

Certain categories of creditors will have the opportunity to vote on the plan before it is finalized and submitted for evaluation by the bankruptcy judge. Managers and lawyers for the exchange say the plan is designed to achieve the fairest and most favorable outcome for all creditors and stakeholders.

One FTX creditor noted that the plan violates the exchange’s user agreement, which states that digital assets are the property of customers.

Source: Twitter.com

Bloomberg noted that the new plan does not contain information about the relaunch of the platform, although the managers said they would provide it by mid-December.

It also became known that from August through November, FTX spent $118,1 million on lawyers from Alvarez and Marshall, Sullivan & Cromwell, AlixPartners, and others. That’s about $1,3 million a day or $53 000 an hour. Paying them also reduces the amount of funds that will be distributed to users and creditors.

Earlier this month, FTX also challenged the US Internal Revenue Service’s $24 billion claim. Through the court, it demanded that officials explain how such an amount was generated.

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