FTX Debtors to Evaluate Claims Using Petition Date Crypto Prices

• As of the publishing, the price of Bitcoin is $41,920, up from $17,035 during the filing.
• Debts would be calculated using the value as of the date of the bankruptcy filing.

In an updated Chapter 11 plan of reorganization, the creditors of the bankrupt FTX crypto exchange have said that the value of client asset claims would be adjusted backwards to the date of the firm’s collapse in November 2022.

The debtors recently said in a court filing in the U.S Bankruptcy Court for the District of Delaware that any claim by a holder seeking compensation from the exchange for customer entitlements would be calculated using the value as of the date of the bankruptcy filing, which was November 11, 2022.

Claims are supposed to be valued according to the value of the crypto asset converted to cash using conversion rates found in a table.

Substantial Debt

Nevertheless, cryptocurrency prices have risen after the bankruptcy filing. As of the publishing, the price of Bitcoin is $41,920, up from $17,035 during the filing. The creditors of the defunct exchange will get their money back from the sale of almost $873 million worth of trust assets that FTX was authorized to make last month, on November 30.

The debtors in the FTX bankruptcy are complex with substantial debt, which is the most peculiar aspect of the matter. At the same time, on December 7, the FTX 2.0 Customer Ad Hoc Committee suggested changing the restructuring plan to keep all stakeholders’ interests in check.

On the other side, the operations of crypto assets connected to Alameda Research and FTX have recently come under light. In the last several months, many cryptocurrency exchanges have received digital assets worth millions of dollars from wallets associated with these now-defunct businesses. Moreover, the ongoing IRS’s $24B claim in unpaid taxes are adding challenges to the already substantial debt.

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