FTX creditors are challenging the bankrupt crypto exchange's plan to value their assets based on 2022's low cryptocurrency prices, advocating for repayments that mirror the current market surge.
The Official Committee of Unsecured Creditors supports this stance, believing it to be the most efficient method for expediting the Chapter 11 confirmation process.
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The heart of the dispute lies in the method of calculating the value of cryptocurrency deposits. The debtor's motion, as stated, suggests that if the court does not consider these deposits as part of the estate, then the appreciated cryptocurrencies, now worth over $5 billion more, should be returned to customers in their original form, rather than being used for other claims.
FTX's proposed bankruptcy plan involves reimbursing customers in US dollars, pegged to the value of cryptocurrencies at the time of the crypto exchange's November 2022 bankruptcy filing.
According to the customers, this valuation significantly underrepresents the current value of cryptocurrencies, which have seen a substantial rise since the 2022 market low.
This view is echoed by numerous FTX customers globally, who have submitted letters to the US bankruptcy court, contesting FTX's valuation approach before a crucial court hearing scheduled for January 25th in Wilmington, Delaware. These customers argue that the proposed plan unfairly favors holders of stablecoins and external investors who purchased FTX bankruptcy claims at lower prices.
Adding to the controversy, FTX customers have contested the decision to value the company's equity shares and token, FTT, at zero. This move would result in over $700 million in FTT and FTX equity held by customers being wiped out under the bankruptcy plan.
The issue at hand revolves around the valuation method for cryptocurrency assets in the FTX bankruptcy case. While FTX insists on using 2022 prices, creditors demand valuations that reflect the current market, a decision that could significantly impact the final repayments to affected customers.
