FTX victims are dissatisfied with bankruptcy proceedings and feel ‘angry and robbed’
FTX victims expressed dissatisfaction with the defunct exchange’s bankruptcy proceedings, arguing that the assets overseeing the bankruptcy proceedings were no different from ‘a company run by Sam Bankman-Fried (SBF).’ Their concerns arise from the compensation payable by FTX’s bankruptcy estate, which may not attempt to adequately meet what investors believe they are rightfully entitled to.
In court papers, they stated that the digital asset has seen massive growth since FTX went bankrupt during the 2022 bear market, and that compensation is being calculated based on the asset’s price during that period. 98% of investors are expected to receive 118% of the funds they have left in FTX. Nonetheless, some investors are anxious that they may not get their money back.
“FTX customers are feeling ‘angry and robbed,’ with many of them viewing the bankruptcy proceedings as ‘an act of secondary theft,’” said lawyers representing a group of defrauded investors. The dollar value is calculated by taking into account the losses that will accumulate due to the huge rise in cryptocurrency prices over the past few months.
SOL surged 9x after the FTX failure, while BTC surged 4x after investors formally petitioned for their lost funds. “Had it not been for the crimes for which SBF was found guilty (e.g., the theft and misuse of client assets), clients would likely own their cryptocurrency investments today,” the filing reads. And by owning the investment, they would have realized the profits the market has delivered since FTX went bankrupt in 2022. Sam Bankman Fried (SBF) is responsible for wasting at least $8 billion. He paid $11 billion in fines during his conviction and was sentenced to 25 years in prison for fraud.
The filing also sets out how the exchange’s bankruptcy estate prioritized various investors over others, leaving some investors in the dark. FTT token investors are at the bottom of the priority list set by the Insolvency Service and are reasonably worried that they will never be able to consolidate their funds.
“It is highly unlikely that holders of such tokens will receive any compensation from the estate,” the court filing states.
This is an image by u_ukgjgf0syq obtained from Pixabay.
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