Bankrupt cryptocurrency exchange FTX recently updated its repayment plan, but Sunil Kavuri, the representative of the community’s creditors, suggested on Wednesday evening on the X platform that creditors should vote against FTX’s current proposed cash compensation plan and insist on demanding compensation in the form of physical cryptocurrencies.
(Background:
FTX repayment progress: 98% of creditors will receive a 118% cash reimbursement! The earliest distribution will be before September.)
(Supplement:
Voyager repayment progress: Settling with FTX and reimbursing creditors $484 million.)
Table of Contents
FTX: Almost all creditors can receive full compensation
FTX Creditors: Compensation should be in physical assets, not dollars
FTX Creditors Committee: Objection submission deadline is 6/5
Since its closure in November 2022, bankrupt cryptocurrency exchange FTX has been raising funds to compensate users for their losses. The current progress indicates that victims may be compensated as early as this year.
FTX: Almost all creditors can receive full compensation
According to a statement released by FTX on Tuesday evening, FTX estimates that its total debt amounts to approximately $11.2 billion. However, after selling off its assets, FTX will have approximately $14.5 billion to $16.3 billion in cash available for compensation to creditors. FTX has also proposed a corresponding compensation plan, stating that most users (those who previously held funds below $50,000) will receive approximately 118% in loss compensation, equivalent to an annualized interest rate of about 9%. Some creditors may receive 142% in compensation. FTX CEO John Ray stated, “It is important to clarify that this loss compensation is calculated based on the platform’s funds on the day of filing for bankruptcy under Chapter 11. Therefore, unless users’ assets held in FTX are stablecoins, they will still suffer significant losses (at that time, BTC was only $17,000 per coin)…”.
FTX Creditors: Compensation should be in physical assets, not dollars
However, Sunil Kavuri, the representative of FTX creditors, is not satisfied with FTX’s compensation plan. He suggested in a post on the X platform on the evening of the 8th that creditors should vote against the restructuring plan. Kavuri believes that most of the assets held by FTX at the time of its closure were in the form of spot tokens, which is why he is particularly dissatisfied with this compensation plan.
FTX Creditors Committee: Objection submission deadline is 6/5
According to FTX’s documents, the restructuring team’s plan is for 98% of creditors to receive 118% in loss compensation within 60 days after court approval. It is understood that US bankruptcy judge John Dorsey plans to hold a hearing on this plan and the voting process in late June. As for the objections that have arisen, the community’s FTX Creditors Committee stated on the X platform that their current position is not fully in agreement with FTX’s restructuring plan. They will continue to evaluate the plan, and the deadline for any potential objections is June 5.
The committee added that the most important thing is to maximize the recovery of creditors’ losses and shorten the time for FTX to repay its debts.
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