The FTX Debtors estate has filed an amended Chapter 11 to its reorganization plan today, leaving investors its creditors dumbfounded on the defunct exchange’s next steps. According to the proposed plan, under the leadership of CEO John Ray III and the legal team from Sullivan & Cromwell, the estate is looking to value crypto claims at the time the company filed for bankruptcy last year, not current market values. 

FTX Debtors’ Reorganization Plan

FTX’s collapse in November 2022 sent ripples across the crypto industry that are still being felt today, one year later. The collapse led to a further cascade in already struggling crypto prices, leading to some wondering if that’s what might be the end of a flourishing crypto industry. 

At the time of the FTX bankruptcy, Bitcoin was valued at approximately $17,000, less than a quarter of its all-time high of $69,000. Since then, however, the cryptocurrency industry has made significant progress toward recovery, with Bitcoin currently trading at $42,000.

According to the new filing made in the United States Bankruptcy Court for the District of Delaware, FTX’s debtor estate asked that the value of any customer entitlement claim against the exchange be at the value of accounts and assets when the crypto exchange collapsed. If approved, this would mean the crypto assets would be converted to cash and then paid to creditors.

FTTUSD currently trading at $3.730 territory. Chart: TradingView.com

FTX Debtors have filed the reorg. Plan

Most importantly they have ignored FTX TOS that states Digital Assets are the property of Users and not FTX Trading

The plan says that Digital Assets are valued at Petition Date conversion rates (prices) pic.twitter.com/WTj07nlOP5

— Sunil (FTX Creditor Champion) (@sunil_trades) December 16, 2023

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Author: Scott Matherson

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