FTX Debtors have submitted a revamped Plan of Reorganization, which deviates from FTX Trading’s original Terms of Service (TOS). The revised plan, filed recently, follows an agreement with creditor stakeholders reached in October.
The updated Chapter 11 Plan of Reorganization, led by CEO John Ray III and legal representation from Sullivan & Cromwell, introduces a contentious shift in the valuation of cryptocurrency claims. A key aspect of the plan is the retroactive valuation of customer asset claims to the date of FTX’s collapse on November 11, 2022.
This departure from FTX’s TOS has sparked controversy, as it proposes valuing digital assets based on their conversion rates at the time of the bankruptcy filing, rather than acknowledging them as the property of users. Concerns have been raised about the implications for users and their holdings.
According to a recent court filing, any customer entitlement claim against FTX will be based on the asset’s value as of the date the exchange filed for bankruptcy. The collapse of FTX triggered a market dip that has since rebounded, with the global crypto market cap surging from approximately $856 billion to $1.6 trillion.
The proposed plan has raised the stakes for creditors, as FTX’s native token has nearly doubled in value during this period. Sunil Kavuri, a vocal FTX creditor, alleges that the reorganization plan contradicts FTX’s TOS and accuses the exchange’s founder, SBF, of stealing digital assets owned by FTX customers.
The plan includes a customer preference settlement to address specific claims and actions related to customer entitlements. Subject to court approval, this settlement aims to be fair and equitable for all parties involved. The plan also proposes substantive consolidation, merging the estates of the Consolidated Debtors into a single entity for implementation.
The deviation from FTX’s original Terms of Service regarding digital asset ownership marks a pivotal moment in the restructuring efforts of the bankrupt company. The controversy surrounding the retroactive valuation of cryptocurrency claims adds complexity to the ongoing Chapter 11 proceedings.
This News Article was automatically generated by Bob the Bot (AI)
| Information | Details |
|---|---|
| Geography | Global |
| Countries | |
| Sentiment | neutral |
| Relevance Score | 1 |
| People | SBF, Sunil Kavuri, John Ray III |
| Companies | FTX Debtors, Sullivan & Cromwell, United States Bankruptcy Court for the District of Delaware, Consolidated Debtors, FTX Trading |
| Currencies | None |
| Securities | None |
