FTX Debtors’ Bitcoin Price Proposal Unveiled – A Risky Move or Smart Strategy?
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FTX, the now-bankrupt cryptocurrency exchange, is facing a legal challenge from its customers over the valuation of digital asset claims.
A recent court filing revealed that FTX is seeking approval to appraise customer claims in U.S. dollars, based on the cryptocurrency prices as of the bankruptcy date, November 11, 2022. This move has drawn criticism from creditors, who argue that the proposed values significantly undervalue their digital assets.
Customers Rally Against Undervalued Crypto Claims
The court document, dated December 27, details FTX’s proposal to estimate Bitcoin at $16,871 and Ethereum at $1,258, while Solana (SOL) and Avalanche (AVAX) are valued at $16 and $14.19 respectively. Stablecoins like USDT, TUSD, and BUSD are also marked slightly lower than their typical $1 value. Creditors of FTX, including some of its most prominent, have condemned this valuation, labeling it as a gross underestimation and urging other customers to oppose the motion.
A Call to Action for Affected Customers
Sunil Kavuri, a notable creditor, and others in the FTX community are urging customers to actively contest this valuation. The FTX 2.0 Coalition, representing a group of creditors, has advised customers wanting to challenge the plan to write directly to the judge overseeing the bankruptcy case. This guidance highlights that no legal representation is required to express objections to the court.
Discrepancy in Digital Asset Valuation
The filing by FTX suggests values for approximately 500 digital assets, including major cryptocurrencies and various tokenized assets. However, the listed prices, such as $16,871 for Bitcoin and $1,258 for Ethereum, are markedly lower than their market values on the date of FTX’s collapse. The proposal excludes an estimated price for FTX Token (FTT) but includes leveraged tokens, tokenized stocks, spot derivatives, and crypto futures.
If the court approves FTX’s valuation plan, many cryptocurrency holders could miss out on potential gains from their digital assets. The proposed values, based on rates from the bankruptcy date, might not accurately reflect the current market conditions.
Customers who disagree with the proposed valuation have until January 11 to file their objections, highlighting a crucial window for those seeking to contest the exchange’s estimates.
Filed under: Bitcoin - @ December 29, 2023 2:24 am