FTX Debtors File Amended Chapter 11 Plan
The debtors of the now-defunct cryptocurrency exchange FTX have submitted an amended Chapter 11 plan of reorganization. The plan states that customer asset claims will be valued retroactively to the time of the exchange’s collapse in November 2022.
Customer Entitlement Claims
In the filing made to the United States Bankruptcy Court for the District of Delaware, the debtors clarified that any customer entitlement claim against FTX will be based on its value as of the petition date, regardless of its nature.
FTX Bankruptcy
On November 11, 2022, FTX and its 130 affiliate companies filed for bankruptcy. At that time, Bitcoin was priced at $17,036. Currently, Bitcoin is valued at $42,272.
Sale of Trust Assets
Last month, FTX received approval to sell around $873 million worth of trust assets. The proceeds from this sale are intended to repay the creditors of the collapsed exchange.
Hot Take: FTX Debtors Set Retroactive Value for Customer Asset Claims
The debtors of FTX have proposed an amended Chapter 11 plan that retroactively values customer asset claims to the time of the exchange’s collapse. This move could potentially benefit customers whose claims would be evaluated based on Bitcoin’s current price rather than its value at the time of filing for bankruptcy. While this may lead to higher compensation for customers, it remains to be seen how this plan will be implemented and if it will be approved by the court. The sale of trust assets by FTX is a step towards repaying creditors and resolving the financial obligations resulting from the exchange’s downfall.
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