FTX’s reorganization plan, led by CEO John Ray III and the legal team of Sullivan & Cromwell, has been revised to include the valuation of crypto claims at the time of the bankruptcy filing. The plan, filed under Chapter 11, outlines how these claims will be treated in the case. Notably, digital assets held by claimants will be valued in cash based on their worth on November 11, 2022, the date of the bankruptcy filing.
The collapse of FTX had initially caused a dip in the market, but the crypto market has since recovered, with the global market cap growing from $856 billion to 1.6 trillion. FTX’s own token has also increased significantly during this time. If the revised plan is approved, creditors could potentially miss out on millions in potential gains.
One prominent FTX creditor, Sunil Kavuri, argues that the reorganization plan contradicts FTX’s Terms of Service, which stated that digital assets belonged to customers and not the exchange. Kavuri claims that FTX CEO SBF stole digital assets owned by FTX customers. This dispute adds a layer of complexity to the process.
The reorganization plan allows creditors from specific classes to vote on the amended plan. The Debtors emphasize the compromises made to create a fair and equitable outcome for all creditors and stakeholders. Approval thresholds based on dollar amounts and the number of claimants will need to be met for the plan to be implemented. However, in certain situations known as “cram-down,” classes of creditors who do not agree to the plan can still be compelled to accept it if it is deemed fair and equitable.
The Block reached out to FTX for comment, but they did not respond immediately.