- FTX debtors have proposed a revised Chapter 11 reorganization plan for the cryptocurrency exchange.
- The plan aims to determine the value of customer claims based on the prices of crypto assets at the time of FTX’s November 2022 crash.
The debtors of FTX, along with lawyers from Sullivan & Cromwell, have amended the Chapter 11 reorganization plan for the bankrupt cryptocurrency exchange.
According to the amended plan, the value of claims on FTX clients’ assets will be established retroactively, based on the prices of cryptocurrencies at the time of the exchange’s bankruptcy filing in November 2022.
FTX Debtors have filed the reorg. Plan
Most importantly they have ignored FTX TOS that states Digital Assets are the property of Users and not FTX Trading
The plan says that Digital Assets are valued at Petition Date conversion rates (prices) pic.twitter.com/WTj07nlOP5
— Sunil (FTX Creditor Champion) (@sunil_trades) December 16, 2023
It should be noted that the value of most cryptocurrencies has since recovered after FTX’s bankruptcy. For example, Bitcoin was trading near $17,000 in November 2022, but its current cost is $41,200.
Bitcoin BTCOne of FTX’s creditors, Sunil Kavuri, argues that the new reorganization plan contradicts FTX’s terms of service. He claims that digital assets belong to the clients, not the exchange itself.
Court filings reveal that FTX accumulated legal and consulting fees amounting to over $118 million between August and October 2023, averaging $1.3 million per day. The largest bill came from consulting firm Alvarez and Marshall, whose services for three months were valued at $35.8 million.
Data provided by user X (formerly Twitter) in a December 17 post suggests that the total legal costs amount to around $350 million.
In late November 2023, FTX received authorization to sell trust assets with an estimated value of $744 million. The proceeds from the sale will be used to repay debts to the exchange’s creditors and are seen as a significant step towards resolving the financial obligations stemming from FTX’s bankruptcy.
It should be noted that in November, FTX filed a lawsuit against Bybit exchange seeking the return of $953 million.