FTX creditors: Based on current prices, creditors can only receive “10%-25% of the cryptocurrency”

According to the latest revised bankruptcy documents shared by FTX creditor Sunil Kavuri, FTX creditors can only get back 10%-25% of the cryptocurrencies. Kavuri explained that creditors will be repaid based on the filing date, when the price of cryptocurrencies was much lower than the current level. To put this in perspective, the price of Bitcoin was about $16,000 when the legal petition was filed. Kavuri said the decision to use the filing date price to repay creditors and customers has sparked dissatisfaction among FTX creditors: "Many FTX customers continue to suffer mental distress, panic attacks, divorce, and suicidal thoughts because their life savings have been stolen and their property has not been returned." Kavuri also believes that SBF's use of customer funds to pay outstanding debts violates FTX's terms of service and the broader definition of property rights: "The terms of service clearly state that ownership of digital assets belongs to FTX customers. SBF was convicted without a doubt for violating the terms of service and transferring customer funds to repay Alameda loans and purchase Robinhood shares." On September 6, 2024, FTX estate reached an agreement with Emergent Technologies, an entity created by SBF, to ensure that $600 million in Robinhood shares will be repaid to creditors. It's not just Kavuri and others who oppose FTX's property reorganization plan. In August 2024, a U.S. trustee overseeing bankruptcy proceedings questioned FTX's reorganization, claiming that the plan provides too much legal protection for the administrators and representatives of FTX's bankruptcy estate. Trustee Andrew Vara noted in legal documents that these types of protections are not standard in similar cases, but rather a worrying anomaly: “Such an exemption would far exceed the protections afforded to estate professionals, whose employment and compensation are subject to court approval and oversight in the case.” The U.S. SEC similarly said that they might object to FTX’s restructuring plan if FTX chooses to repay customers with stablecoin payments. (Cointelegraph)