FTX creditors may recover as little as 10-25% of their original cryptocurrency holdings, according to newly revised bankruptcy documents. This estimate, shared by FTX creditor and activist Sunil Kavuri, has sparked significant frustration among the exchange\u2019s customers, many of whom lost substantial amounts when FTX collapsed.<\/p>\n\n\n\n
The main point of contention is that creditors will be reimbursed based on cryptocurrency values at the time FTX filed for bankruptcy, not current market prices. When the petition was filed, Bitcoin traded at around $16,000 \u2014 much lower than its current value. This approach has been criticized for further minimizing the amount creditors will receive in comparison to the present worth of their assets.<\/p>\n\n\n\n
Sunil Kavuri, speaking to Cointelegraph, expressed the widespread outrage felt by FTX creditors:<\/p>\n\n\n\n
\u201cCrypto holders are not whole at petition date prices as confirmed by the debtors, DOJ, and Judge Kaplan. Many FTX customers continue to suffer from mental distress, panic attacks, divorces, and suicidal thoughts as their life savings have been stolen.\u201d<\/p>\n\n\n\n
The decision to base repayments on petition date prices has angered many affected by FTX\u2019s collapse. Multiple creditors voiced their displeasure, with one describing it as “disgusting” that such a decision was added after voting on the repayment plan. Another creditor lamented the lack of legal protection for investors, while others argued they had been “scammed twice” \u2014 first by the collapse and then by the terms of repayment.<\/p>\n\n\n\n
Kavuri also accused FTX founder Sam Bankman-Fried of violating the company’s terms of service, which clearly stated that FTX customers retained ownership of their digital assets. Instead, Bankman-Fried allegedly used customer funds to settle debts at Alameda Research, his trading firm, and to purchase Robinhood shares.<\/p>\n\n\n\n
“The terms of service are unambiguous that title of digital assets is owned by the FTX customer,” Kavuri stated, noting that Bankman-Fried had been convicted of transferring customer funds improperly.<\/p>\n\n\n\n
In an effort to repay creditors, the FTX estate reached an agreement on September 6, 2024, to recover $600 million in Robinhood shares from Emergent Technologies, a company founded by Bankman-Fried. These shares will contribute to the pool of assets used to reimburse FTX\u2019s creditors, but they will likely cover only a fraction of the total losses.<\/p>\n","protected":false},"excerpt":{"rendered":"
FTX creditors may recover as little as 10-25% of their original cryptocurrency holdings, according to newly revised bankruptcy documents. This estimate, shared by FTX creditor and activist Sunil Kavuri, has sparked significant frustration among the exchange\u2019s customers, many of whom lost substantial amounts when FTX collapsed. Reimbursement Based on Lower Petition Date Prices The main […]<\/p>\n","protected":false},"author":5,"featured_media":8230,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[30],"tags":[],"class_list":{"0":"post-11575","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-exchange"},"acf":[],"yoast_head":"\n