Bankrupt cryptocurrency exchange FTX has recently updated its repayment plan, but Sunil Kavuri, the representative of the community creditors, suggested on Wednesday (8) 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.
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FTX: Almost all creditors can receive full compensation
FTX Creditors: Should be compensated with physical assets instead of USD
FTX Creditors Committee: Deadline for submitting objections is 6/5
Since its closure in November 2022, bankrupt cryptocurrency exchange FTX has been continuously raising funds to compensate users for their losses, and it is expected to start compensating victims as early as this year.
FTX: Almost all creditors can receive full compensation
According to a statement released by FTX on Tuesday (7) evening, FTX estimates that it owes a total debt of about $11.2 billion, but after selling its assets, it will have approximately $14.5 billion to $16.3 billion in cash available for compensation to creditors.
At the same time, FTX has proposed a corresponding compensation plan, stating that most users (those who have held funds of $50,000 or less) can receive approximately 118% compensation for their losses, which is equivalent to an annual interest rate of about 9%. Some creditors can receive 142% compensation.
In response, FTX CEO John Ray stated:
However, it should be emphasized that the compensation for losses is calculated based on the funds held by FTX on the day of the exercise of Chapter 11 bankruptcy law. Therefore, unless the assets held by users in FTX are stablecoins, they will still suffer significant losses (BTC was only $17,000 at that time)…
FTX Creditors: Should be compensated with physical assets instead of USD
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:
It can be seen that most of Kavuri’s assets at the time of FTX’s closure should have been stored in the form of spot tokens, which is why he is particularly dissatisfied with this compensation plan.
FTX Creditors Committee: Deadline for submitting objections is 6/5
According to FTX’s documents, the plan of the restructuring team is that 98% of the creditors will receive 118% compensation for their losses within 60 days after obtaining court approval. It is understood that US bankruptcy judge John Dorsey plans to hold a hearing on the plan and voting procedures in late June.
Regarding the objections currently raised, the community-driven FTX Creditors Committee stated on the X platform that its current position is not entirely in agreement with FTX’s restructuring plan. It 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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