According to a report by Cointelegraph, several FTX customers have requested a US bankruptcy court judge to block the bankrupt cryptocurrency exchange from valuing their cryptocurrency deposits based on the prices in 2022. They believe that this practice hinders them from benefiting from the recent increase in cryptocurrency prices.
In support of the motion to estimate claims by debtors based on digital assets, the Unsecured Creditors Official Committee expressed the viewpoint that collective estimation of claim values is the most effective way to simplify the claim coordination process and expedite the confirmation of the Chapter 11 bankruptcy proceedings.
The motion by the debtors states that according to the bankruptcy plan, FTX plans to repay customers in US dollars based on the cryptocurrency market price at the time of FTX’s bankruptcy filing in November 2022. Although FTX argues that US bankruptcy regulations require the use of that date to estimate claim values, customers believe that this method undervalues the cryptocurrency as it has significantly increased since the market low in 2022.
FTX creditor Sunil Kavuri expressed on the X platform that his lawyers Moskowitz and Boies oppose the motion to estimate claims by debtors. Cointelegraph contacted Kavuri to clarify whether the lawyers argue that customers should receive compensation in the form of cryptocurrency. Kavuri explained that the lawyers’ argument is that customers should “at least recover the value of the cryptocurrency” as the issue of ownership has not yet been resolved.
In addition to the Unsecured Creditors Official Committee, FTX customers from around the world also submitted numerous similar letters questioning FTX’s valuation method to the US bankruptcy court before the deadline on Thursday. FTX aims to have its cryptocurrency price list approved at a court hearing in Wilmington, Delaware on January 25.
Some customers argue that the proposal is unfair to holders of Bitcoin and other volatile assets, claiming that it gives preferential treatment to stablecoin holders and external investors who obtained FTX bankruptcy claims at a lower cost.
In court documents dated December 27, 2023, FTX stated that determining cryptocurrency prices based on the bankruptcy filing date is the only practical method to initiate customer repayments, and mentioned that the court has allowed other bankrupt cryptocurrency companies such as Celsius, BlockFi, and Voyager Digital to assess customer claims based on the bankruptcy filing date.
Related reports: “SOL can recover up to $16! FTX claim valuation confirmed, objections must be filed before January 11” “Various ‘money recovery lawsuits’ still pending! Legal experts: FTX bankruptcy case may take years to conclude” “FTX bankruptcy team to liquidate 35 properties in the Bahamas, proceeds to be used to repay FTX customers”
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