FTX Files Plan to Return Funds to Customers and Creditors
FTX has submitted a proposal to distribute billions of dollars to its customers and creditors. The plan does not mention whether the exchange will resume operations. It will be sent to creditors for voting before being presented to the court for final approval. As per the plan, the funds will be distributed in cash after liquidating a significant portion of the firm’s crypto holdings.
Concerns Over FTX’s Legal Fees
Adam Cochran, a partner at CHEV, criticized the valuation method proposed by FTX, stating that it should be illegal. He argued that customers should receive their assets’ full value instead of being paid in cash. Cochran also expressed disappointment over FTX’s failure to recognize property rights for digital assets.
Another point of concern is FTX’s substantial legal expenses. Jameson Lopp, co-founder of Casa HODL, highlighted the company’s high legal fees and compared them to the customer shortfall amounting to around $1.4 billion. FTX employs numerous lawyers, accountants, paralegals, and finance advisors, costing up to $1.5 million per day.
IRS Seeks Unpaid Taxes from FTX
The US Internal Revenue Service (IRS) is attempting to collect $24 billion in unpaid taxes from FTX. This further threatens the amount available for distribution to creditors.
FTT Price Outlook
Despite these developments, FTT, the native token of FTX, has experienced a 5% increase in value today. At the time of writing, it is priced at $3.74 according to CoinGecko. However, FTT remains significantly down from its peak in September 2021.
Hot Take: FTX Faces Challenges Amidst Distribution Plan
FTX’s proposal to return funds to customers and creditors has raised concerns regarding the valuation of assets and the company’s legal expenses. Additionally, the IRS’s pursuit of unpaid taxes adds further uncertainty to the distribution process. While FTT has seen a recent increase in value, it remains far below its previous peak. FTX continues to face challenges as it navigates through its bankruptcy proceedings.
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