FTX users ask court to reject repayment plan based on Nov. 2022 values
Under the proposed plan, the FTX bankruptcy estate would settle up with customers by repaying them in US dollars based on the value of their crypto assets in November 2022
Keerthi Satheesh/Shutterstock modified by Blockworks
Former FTX customers are asking a judge to reject the bankrupt exchange’s proposed reimbursement values for cryptocurrencies, arguing that the plan would cost them significant profits.
Under the proposed plan, the FTX estate would settle up with customers by repaying them in US dollars based on the value of their crypto assets in November 2022.
But cryptocurrencies have rebounded since FTX’s collapse — bitcoin (BTC) has gained more than 160% alone — and exchange clients argue a payout based on proposed strike prices is unfair. Under FTX’s terms of service, one customer pointed out, the client is the owner of the digital asset, not FTX, so fiat reimbursement is unacceptable.
Read more: FTX debtors push back against $24B IRS claim
“Having been victims of FTX once, I implore you to intervene and prevent the ongoing second act of theft taking place before our very eyes,” one former FTX retail client wrote Thursday to Judge John Dorsey, who is overseeing the bankruptcy proceedings in Delaware.
Under the current plan, customers will be reimbursed around $16 per Solana (SOL) token, and $1,260 per ether (ETH). As of Friday, SOL was currently trading at about $94 and ETH was sitting near $2,450.
FTX argues that under bankruptcy law, values offered should be based on the date of bankruptcy. Plus, according to the debtors, liquidating each customer’s holdings on an individual basis is a lengthy process.
Read more: Bankman-Fried’s crypto portfolio would be up billions this year — thanks to Solana
More than 150 former exchange clients not represented by individual counsel had filed objections regarding the plan before the deadline on Thursday.
The court is scheduled to rule on the proposed prices during a hearing on Jan. 25.
Get the news in your inbox. Explore Blockworks newsletters:
- The Breakdown: Decoding crypto and the markets. Daily.
- Empire: Crypto news and analysis to start your day.
- Forward Guidance: The intersection of crypto, macro and policy.
- 0xResearch: Alpha directly in your inbox.
- Lightspeed: All things Solana.
- The Drop: Apps, games, memes and more.
- Supply Shock: Bitcoin, bitcoin, bitcoin.
