Bankruptcy lawyers for FTX are proposing a repayment plan for FTX customers that calculates the USD value of their holdings as of November 11, 2022. On that date, FTX originally petitioned for bankruptcy protection.

Back then, bitcoin was worth $16,871. At press time, bitcoin is worth about 150% more at $42,154.

Most customers opposed a repayment plan based on such inferior prices. Nevertheless, on Wednesday, a Delaware court ruled that bankruptcy judge John Dorsey has broad discretion to determine allowable methods for calculating bankruptcy claims.

With that approval and case law backing, Dorsey wrote, “I conclude that debtor’s use of the petition date for determining the value of the digital assets claims is appropriate.”

FTX executives Sam Bankman-Fried, Caroline Ellison, Nishad Singh, and Gary Wang have been found guilty of federal crimes. In particular, they improperly diverted FTX customer deposits into personal payouts, illegitimate corporate expenses, and a proprietary trading company that they controlled called Alameda Research.

By the time FTX filed for bankruptcy protection, Alameda owed billions of dollars to FTX that it could never repay.

As claims mounted against the defunct crypto exchange and trading company, the tally reached mind-boggling numbers. The total bankruptcy claims now exceed $2 quintillion. There were millions of customers and countless corporate counterparties who were harmed as the once-$32 billion FTX collapsed to $0.

Each claim, when tallied separately (and therefore, double-counted), sums to more money than the $454 trillion that exists on earth.

FTX authorized to sell Sam Bankman-Fried’s Bahamas penthouse

Read more: FTX-funded charity Effective Ventures agrees to return donations

Incredibly, however, FTX bankruptcy attorneys are still hoping for a so-called pay-in-full plan. It assumes that US regulators, including the IRS and SEC, will subordinate behind claims of regular customers — allowing FTX to repay customers and not pay its multi-billion dollar regulatory fines.

This is a big assumption. For context, the IRS alone demanded $24 billion from the estate. Other regulators and government entities around the world have also made large demands.

Read the full article here

Share.

Leave A Reply

Your road to financial

freedom starts here

With our platform as your starting point, you can confidently navigate the path to financial independence and embrace a brighter future.

Registered address:

First Floor, SVG Teachers Credit Union Uptown Building, Kingstown, St. Vincent and the Grenadines

CFDs are complex instruments and have a high risk of loss due to leverage and are not recommended for the general public. Before trading, consider your level of experience, relevant knowledge, and investment objectives and seek financial advice. Vittaverse does not accept clients from OFAC sanctioned jurisdictions. Also, read our legal documents and make sure you fully understand the risks involved before making any trading decision