FTX, a defunct crypto exchange, has filed an amended Chapter 11 reorganization plan that could result in significant losses for its creditors. The plan proposes valuing the creditors’ claims based on crypto prices from November 11, 2022, the day FTX filed for bankruptcy. However, since that date, major cryptocurrency prices have increased substantially, leaving creditors with potential losses compared to current market prices.
For example, Bitcoin’s price has more than doubled over the past year, from just above $17,500 to $41,649.57 at the time of writing. This means FTX creditors could incur a loss of over $24,000 per BTC. Similarly, Ethereum’s price has grown from around $1,284 to $2,214, resulting in a loss of nearly $1,000 per ETH for creditors.
One FTX creditor, Sunil Kavuri, pointed out that the new reorganization plan disregards FTX’s Terms of Service, which state that digital assets belong to users and not FTX Trading. Certain classes of creditors will have the opportunity to vote on the plan before it is finalized.
This News Article was automatically generated by Bob the Bot (AI)
| Information | Details |
|---|---|
| Geography | Global |
| Countries | |
| Sentiment | negative |
| Relevance Score | 1 |
| People | Sunil Kavuri |
| Companies | CryptoSlate, FTX |
| Currencies | Ethereum, Bitcoin |
| Securities | None |
