In a revised Chapter 11 reorganization plan, FTX debtors state that crypto claims by customers will be assessed using a conversion table, with a valuation based on the petition date.
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The debtors of the now-defunct cryptocurrency exchange FTX have filed an amended Chapter 11 plan of reorganization, which proposes that the value of customer asset claims will be retroactively set to the time when the exchange collapsed in November 2022.
In a recent court filing in the United States Bankruptcy Court for the District of Delaware, the debtors outlined that any customer entitlement claim against the exchange aimed at compensating the holder will be based on the value as of the date the exchange filed for bankruptcy on Nov. 11, 2022.
If the plan is approved, the value of a claim will be determined by the crypto asset’s value into cash using conversion rates specified in a conversion table.
Court filing in the U.S. bankruptcy court. Source: Kroll
However, there has been a rise in crypto prices since the bankruptcy filing. Bitcoin (BTC) was valued at $17,036 during the filing, but at the time of publication, the price stands at $42,272.
Meanwhile, on Nov. 30, FTX was approved to sell approximately $873 million of trust assets, with the proceeds intended to repay creditors of the collapsed exchange.
Related: Sam Bankman-Fried’s lawyer says FTX fraud trial was “almost impossible” to win: Report
Joseph Moldovan, chair of business solutions, restructuring and governance practices at Morrison Cohen — a New York-based law firm — previously explained to Cointelegraph the complexities of the FTX bankruptcy.
“What’s most unusual about the FTX bankruptcy is that the debtors are complex entities with significant amounts of debt,” he stated.
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
Meanwhile, on Dec. 7, Cointelegraph reported that the FTX 2.0 Customer Ad Hoc Committee proposed to revise the reorganization plan in order to maintain a balance among stakeholder interests.
On the other hand, there has been significant scrutiny of the activities of crypto assets associated with both FTX and Alameda Research in recent times.
On Dec. 9, reports revealed that wallets linked to these defunct entities transferred digital assets worth $23.59 million to multiple crypto exchanges.
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