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FTX Victims Seek Return of $8 Billion in Assets
Attorneys for FTX bankruptcy victims are pushing for the failed crypto exchange's forfeited assets, worth around $8 billion, to be returned to customers, not absorbed into the bankruptcy estate. This plea was made in a U.S. District Court filing in New York.
Reorganization Plan Sparks Outrage
FTX's proposed reorganization plan, offering 98% of creditors 118% of their claims in cash within 60 days, has angered customers. They couldn't benefit from rising cryptocurrency prices while their funds were tied up.
Unfair Valuation Claims
Lawyers argue that valuing customer claims based on depressed prices during the "crypto winter" is unfair. Since then, Solana's price has increased ninefold and Bitcoin's value has quadrupled.
Customer Grievances and SBF's Role
Lawyers Adam Moskowitz and David Boies say customers feel "aggrieved and robbed," viewing the process as a "second act of theft." Former CEO Sam Bankman-Fried (SBF) was convicted of fraud, sentenced to 25 years, and ordered to forfeit $11 billion. The filing claims SBF's crimes left customers without their crypto investments.
Bankruptcy Code and Prioritization
The bankruptcy code prioritizes certain creditors, placing FTX’s FTT token holders near the bottom, making compensation unlikely for them.
Ongoing Uncertainty
Complete accounting hasn't been done yet, but Moskowitz estimates damages over $8 billion. The fluctuating value of cryptocurrencies adds to the uncertainty.
