FTX creditors are waiting for a possible 10-25% crypto recovery, according to Sunil Kavuri, an activist representing their interests. However, the exchange’s decision to set aside around $230 million for its shareholders—about 18% of its available funds—has alarmed customers and crypto enthusiasts, with some terming it ‘criminal’.
FTX could return at least 10% of creditors’ crypto
In an X post, FTX creditor activist Sunil Kavuri estimated that customers and investors could get about 10-25% of their crypto back.
However, the recent disclosure that the exchange would distribute roughly $230 million to its equity holders, which equates to about 18% of its available funds, has invited multiple commentaries, with some openly showing disapproval.
FTX Creditor and Bitcoin maximalist Crypto Notte commented:
Venture funds that bought equity in the business are getting money back, and the money is being taken away from the creditors, e.g., customers who got their money stolen. You thought bankruptcy could not get more criminal, yet there it is.
~Crypto Notte
Notte then called out the US bankruptcy system, describing it as a ‘joke’. In another post, he remarked that the $230 million being handed to shareholders seemed like a big fraction.
With the conversation around crypto recovery still at its peak, FTX continues to wait for the court hearing concerning its reorganization plan on October 7. The plan primarily constitutes the exchange’s liquidation structure that will allow for repayments to its creditors.
According to FTX, over 95% of creditors who voted on the amended plan supported it. However, some of FTX’s creditors, including Sunil Kavuri, have filed an objection to the wind-down plan.
Some have argued that the plan will only exacerbate customers’ pain, subjecting them to taxation on the assets they receive—taxes that could have been avoided if the exchange had included in-kind provisions.
FTX agreed to pay $12.7 billion to its customers
In August 2024, FTX and Alameda Research consented to a repayment order, requiring them to pay $12.7 billion to its customers.
The repayment order was part of a settlement between the Commodity Futures Trading Commission and the bankrupt crypto exchange. At the time, the exchange shared its desire to pay back 100% of all customers’ funds.
The agreement it made with the CFTC allowed for a waiver period for the exchange, during which the commission agreed not to collect any payments until all customers were repaid, with interest. However, FTX will still have to pay $8.7 billion in restitution and $4 billion in disgorgement.
Source: https://www.cryptopolitan.com/ftx-creditors-brace-for-10-25-recovery/