Creditors of the now-defunct cryptocurrency exchange, FTX, have taken a significant step in their efforts to recover their losses.
They have recently submitted a revised Chapter 11 plan of reorganization to the United States Bankruptcy Court for the District of Delaware.
This updated proposal suggests a crucial change in how customer asset claims will be assessed, potentially impacting the recovery amounts for affected customers.
Under this amended plan, the value of customer asset claims would be retroactively set to the moment when FTX faced its demise in November 2022.
This means that any claims submitted by customers to compensate for their losses would be calculated based on the value of their assets as of November 11, 2022, the date of FTX’s bankruptcy filing.
The conversion rates specified in a conversion table would be used to convert crypto assets into their equivalent cash values for this assessment.
However, a significant development has occurred since the bankruptcy filing. Crypto prices have experienced substantial fluctuations, with Bitcoin being a prime example.
At the time of the bankruptcy filing, Bitcoin was valued at $17,036, but as of the latest update, it stands at a significantly higher $42,272.
In a related development, FTX was granted approval on November 30th to sell approximately $873 million worth of trust assets.
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The proceeds from this sale are intended to be directed towards repaying the creditors of the collapsed exchange.
Joseph Moldovan, who leads the business solutions, restructuring, and governance practices at Morrison Cohen, a prominent New York-based law firm, commented on the intricacies of the FTX bankruptcy.
He noted the complexity of the entities involved and the substantial debt they held, making this bankruptcy case particularly unique.
On December 7th, the FTX 2.0 Customer Ad Hoc Committee put forth a proposal to modify the reorganization plan with the aim of balancing the interests of various stakeholders involved in the process.
Meanwhile, concerns and scrutiny have intensified regarding the activities of crypto assets associated with both FTX and Alameda Research.
Reports on December 9th disclosed that wallets linked to these defunct entities had transferred digital assets worth $23.59 million to multiple crypto exchanges, raising questions about the handling of these assets during the bankruptcy proceedings.
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