FTX creditor Sunil Kavuri has long been dissatisfied 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 launched another attack, criticizing FTX CEO John Ray for causing creditors to suffer losses of over $10 billion since taking office, and for not mentioning FTX’s holding 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 had grievances against the FTX restructuring team and the law firm Sullivan & Cromwell (S&C) handling the FTX bankruptcy case.
On the 7th, Sunil Kavuri publicly supported the US senators’ request for a judge to appoint an independent examiner to investigate S&C. He accused S&C of selling assets at a significant discount to conflicted parties and proposing the FTX 2.0 plan, which has resulted in losses of $10 billion in FTX assets, even surpassing the losses incurred by FTX before founder SBF filed for bankruptcy.
Sunil Kavuri mentioned that the sale of SOL by FTX at a significantly cheap price of $64 alone caused billions of dollars in losses for FTX creditors.
Taking aim at S&C and the FTX restructuring team again on the 28th, Sunil Kavuri tweeted a warning that S&C may propose an FTX plan that includes two clauses: absolving S&C of any wrongdoing and making current FTX CEO John Ray, who he called a “puppet,” responsible without 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, which was filled with misinformation and even lies. FTX not only failed to help creditors recover assets but deliberately destroyed the value of the assets that could be recovered by creditors. FTX creditors have suffered losses of over $10 billion.
Sunil Kavuri listed John Ray’s offenses, pointing out that in the statement submitted to the court, John Ray claimed that FTX only had 105 bitcoins when he took over, 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 out of FTX, which means that FTX’s cryptocurrency is not within FTX, which is why creditors cannot recover the cryptocurrency. S&C, which provided services to FTX before the bankruptcy, knew about the existence of the backdoor.
Therefore, Sunil Kavuri stated that he will vote against any compensation plan 100%, and FTX creditors should do the same and hold all FTX conspirators accountable.
S&C has been accused of having conflicts of interest. Previously, FTX creditors filed a class-action lawsuit against S&C last month, accusing S&C of acting as its advisor before the FTX bankruptcy, understanding the operation of the exchange, and ultimately supporting its fraudulent behavior, therefore partially responsible for FTX’s collapse.
Two law professors from Temple University and the University of Pennsylvania, Jonathan Lipson and David Skeel, also published a paper last month accusing S&C of using “deceptive strategies” to take 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 might have obtained new funds and avoided bankruptcy.
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