Join the hunt for $12,000,000+ in NEXO Tokens!

Learn More

FTX creditors seek repayments at current market rates

Creditors argue for fair market value in FTX asset repayments.

FTX creditors seek repayments at current market rates

Share this article

Bankrupt crypto exchange FTX unveiled yesterday a new plan to pay out at least 118% of recognized claims to 98% of its creditors. However, the plan faces pushback from Sunil Kavuri, who speaks for the largest group of creditors. Kavuri has called for a rejection of the proposed restructuring, arguing that repayments should reflect the current market prices of assets, not their value at the time of FTX’s bankruptcy.

Kavuri said the pricing in the petition for repayment underestimated the actual value of FTX customer holdings. He claimed that the FTX debtors had caused creditors more than $10 billion in losses.

The restructuring unit of FTX recovered assets worth between $14.5 and $16.3 billion after a 17-month period, which is more than the exchange’s estimated shortfall of $8 to $10 billion at the time of its collapse. With these recovered funds, the firm asserts it can compensate 98% of FTX’s users.

Those with claims of $50,000 or less are slated to receive at least 118% of their asset value within two months of court approval, while the rest are to be paid the full value of their assets plus a 9% interest rate for the holding period.

Kavuri also pointed out an ongoing lawsuit against Sullivan & Cromwell (S&C), the law firm handling FTX’s bankruptcy, over their previous relationship with the exchange. He opposes the inclusion of an exculpation clause that protects S&C from lawsuits related to misconduct.

The law firm was previously sued by a group of FTX creditors represented by Edwin Garrison. The creditors alleged the firm knowingly provided services or assistance that directly enabled or facilitated FTX’s fraudulent activities.

S&C was also selected to oversee Binance following its settlement with the US Department of Justice.

Share this article