FTX Debtors Propose Estimated Values for Cryptocurrency Claims
FTX Trading Ltd., which is in the process of bankruptcy proceedings, has submitted a motion to estimate the value of claims related to digital assets and fiat currency. The motion proposes estimating the value of various digital assets based on their prices at the time of the bankruptcy filing.
The proposal includes estimated values for around 500 assets, including Bitcoin, Ethereum, Solana, Avalanche, and stablecoins like USDT, TUSD, and BUSD. However, it does not include an estimated value for FTX Token (FTT).
The debtors argue that their valuations are fair and reasonable and represent the value of these digital assets as of the petition date. The court will review and approve these valuations as part of FTX’s bankruptcy proceedings.
Streamlining the Process with a Digital Assets Conversion Table
Given the unique nature of this bankruptcy case involving millions of claims based on digital assets, the debtors propose a Digital Assets Conversion Table to simplify the process and avoid delays. This table estimates the value of each digital asset based on the petition date.
The court has broad discretion in choosing the best method to estimate claim valuations based on digital assets. The debtors used data from Coin Metrics for this purpose.
Calculating Claims and Pending Approval
The proposed plan involves converting the value of digital assets into cash using rates from the Digital Assets Conversion Table and making distributions in cash. Liquidating individual claims for each digital asset is deemed impractical.
Parties involved in the bankruptcy case have until January 11 to file objections, and a hearing is scheduled for January 25. The motion to estimate creditor claims based on proposed pricing is pending court approval.
FTX Users Express Concerns and Criticism
The proposed plan has faced criticism from FTX users, with some labeling it a “scam.” Users have expressed frustration at the extended duration of the case and suggested accepting the offered terms to avoid further uncertainty and legal costs.
FTX has incurred significant legal fees during the bankruptcy proceedings, leading to criticism from creditors. Some creditors argue that the motion undervalues the worth of digital assets and encourage customers to fight against the proposed plan.
The FTX 2.0 Coalition, representing FTX creditors, encourages customers to write a letter directly to the judge overseeing the bankruptcy case to object to the proposed estimation of digital asset values.
Hot Take: Potential Impact on Crypto Holders
If the court approves the plan, crypto holders may miss out on gains from certain tokens, considering the significant price increases in Bitcoin and Ethereum since FTX’s collapse. Bitcoin has surged more than 150%, reaching $42,452, while Ethereum has seen an increase of over 87%, rising from $1,258 to $2,354.
By
By
By
