FTX Creditors Stunned by Minimal Payouts as Bankruptcy Plan Unfolds

According to recently updated bankruptcy documents shared by FTX creditor Sunil Kavuri, those owed money from FTX can expect to recover only 10-25% of their cryptocurrency.

The reimbursements will be based on prices from the petition date, when crypto values were significantly lower. For example, at that time, Bitcoin was valued at around $16,000.

This decision has sparked frustration among many FTX creditors, who are unhappy with being repaid using these older prices. Kavuri highlighted that many creditors are still suffering emotionally from the collapse, as their assets have yet to be returned. Others have voiced similar concerns, criticizing the plan as unfair and deceptive, with some calling it a “second scam.”

Kavuri also argued that Sam Bankman-Fried violated FTX’s terms of service by misusing customer funds to settle debts and buy assets, such as Robinhood shares. Earlier this month, the FTX estate reached an agreement to reclaim $600 million worth of these shares from Bankman-Fried’s company, Emergent Technologies, in an effort to repay creditors.

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The reorganization plan is also facing opposition from other parties. A U.S. bankruptcy trustee raised concerns in August, stating that the plan offers excessive legal protection to those managing FTX’s bankruptcy process. The SEC has also indicated potential objections, particularly if FTX decides to repay creditors using stablecoins.

Source

Alexander Stefanov