FTX’s revised reorganization plan assesses the value of its cryptocurrency claims at the time of bankruptcy.
FTX Debtors Estate, led by CEO John Ray III and attorneys from Sullivan & Cromwell, today amended its Chapter 11 reorganization plan, laying out exactly how bankruptcy claims will be handled in the case.
Specifically, the plan includes a provision that would value claimants’ digital assets for cash as of November 11, 2022, the bankruptcy filing date.
The collapse of FTX led to a notable decline in the market, but it has since recovered healthily, with the global cryptocurrency market capitalization now growing from approximately $856 billion to $1.6 trillion. FTX’s own tokens also nearly doubled during that period. This means creditors could lose out on millions of dollars in potential profits if the plan is approved.
FTX creditor Sunil Kavuri said the reorganization plan goes against FTX’s terms of service, which state that ownership of digital assets lies with customers, not the exchange. “The reason SBF was found guilty beyond a doubt on all seven counts is that it stole digital assets owned by FTX customers,” Kavuri said.
Certain classes of creditors will have the opportunity to vote on the revised reorganization plan, the plan states. In a statement, the debtor writes, “The plan and this public statement reflect a number of compromises made to create the best, most equitable and economical outcome for all creditors and stakeholders in this Chapter 11 case,” to reach this point. Highlight the efforts taken to
For a plan to go into effect, various approval criteria are required, both in dollar amount and number of claimants. However, under certain circumstances, known as “compelling forces,” a class of creditors who have not agreed to the plan may be forced to accept it, as long as the solution is “fair and equitable,” according to statements by the debtors. .
FTX did not immediately respond to The Block’s request for comment.
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