FTX creditor Sunil Kavuri has been expressing dissatisfaction with the FTX restructuring team and the New York law firm Sullivan & Cromwell (S&C), which is responsible for handling the FTX bankruptcy case. On the 28th, he criticized FTX CEO John Ray for causing over $10 billion in losses to creditors since taking office, without mentioning FTX’s holdings of approximately 55 million SOL. He stated that he would oppose any compensation plan proposed by Ray.
Since its collapse in November 2022, the FTX restructuring team has been actively raising funds to repay creditors. However, FTX creditor Sunil Kavuri has consistently expressed his concerns about the FTX restructuring team and Sullivan & Cromwell (S&C).
On the 7th, Sunil Kavuri publicly supported the US senators’ request for a judge to appoint an independent examiner to investigate S&C’s actions. He accused S&C of selling assets to conflicted parties at significant discounts and proposing the FTX 2.0 plan, which has resulted in losses of $10 billion in FTX’s $100 billion worth of assets, exceeding the losses before FTX founder SBF filed for bankruptcy.
Sunil Kavuri mentioned that the sale of SOL by FTX at a significantly lower price of $64 alone has caused billions of dollars in losses for FTX creditors.
On the 28th, Sunil Kavuri once again targeted S&C and the FTX restructuring team, warning that S&C may propose an FTX plan that includes two key terms: exoneration of any wrongdoing by S&C and holding FTX CEO John Ray accountable as a “puppet” without any accountability.
In Sunil Kavuri’s view, John Ray is not a victim, but he submitted a victim impact statement to the court before SBF was sentenced, filled with incorrect information and even lies. FTX not only failed to help creditors recover assets but also intentionally destroyed the value of the assets that creditors could retrieve. The losses of FTX creditors have exceeded $10 billion.
Sunil Kavuri listed John Ray’s wrongdoings, stating that in the statement submitted to the court, John Ray claimed that FTX only had 105 bitcoins when he took over FTX, but he did not mention that FTX also had approximately 55 million SOL.
Sunil Kavuri also pointed out that due to the backdoor of Alameda, SBF transferred funds from FTX, which means that FTX’s cryptocurrencies are not within FTX, and this is why creditors cannot retrieve the cryptocurrencies. S&C, which provided services to FTX before bankruptcy, had long known about the backdoor.
Therefore, Sunil Kavuri stated that he will vote against any compensation plan with 100% opposition, and FTX creditors should do the same and hold all FTX conspirators accountable.
S&C is accused of conflicts of interest. Previously, FTX creditors filed a collective lawsuit against S&C, accusing S&C of acting as its advisor before the bankruptcy of FTX, understanding the operation of the exchange, and ultimately supporting its fraudulent activities, thus shouldering partial responsibility for FTX’s collapse.
Two law professors from Temple University and the University of Pennsylvania, Jonathan Lipson and David Skeel, also published an article last month accusing S&C of using “deceptive strategies” to seize control of FTX from SBF and seek private benefits from Chapter 11 bankruptcy proceedings. If S&C had waited a few more days to assist FTX in filing for Chapter 11 bankruptcy, SBF could have obtained new funding and avoided bankruptcy.
Related reading: FTX discloses current asset total: May have to pay up to $5 billion to the US government, prioritizing repayment to customers and creditors.