A conversion table will be used to evaluate cryptocurrency claims made by customers, with the petition date serving as the basis for valuation, according to a revised Chapter 11 plan of reorganisation from FTX debtors.
As per the recently submitted amended Chapter 11 plan of reorganisation, the debtors of the FTX cryptocurrency exchange have declared that the value of customer asset claims will be adjusted retroactively to the moment of the exchange’s collapse in November 2022.
The debtors stated that any customer entitlement claim against the exchange intended to compensate the holder will be based on the value as of the date the exchange filed for bankruptcy on November 11, 2022, in a recent court filing in the United States Bankruptcy Court for the District of Delaware.
According to the statement, a claim’s value is calculated by converting the value of a crypto asset into cash using conversion rates that are listed in a conversion table.
Nonetheless, since the bankruptcy filing, the price of cryptocurrencies has increased. At the time of filing, the value of Bitcoin was $17,036; however, as of publication, its price is $42,272.
On the other hand, FTX received approval last month, on November 30, to sell trust assets for about $873 million, with the proceeds going towards paying off creditors of the defunct exchange. Previously, Joseph Moldovan, chair of business solutions, restructuring, and governance practices at the New York-based legal firm Morrison Cohen, provided an explanation of the intricacies involved in the FTX bankruptcy.
“What’s most unusual about the FTX bankruptcy is that the debtors are complex entities with significant amounts of debt,” he stated.
However, on December 7, it was announced that in order to preserve the balance of interests among stakeholders, the FTX 2.0 Customer Ad Hoc Committee suggested making revisions to the reorganisation plan.
In contrast, the operations of crypto assets connected to Alameda Research and FTX have recently come under intense scrutiny. NA number of cryptocurrency exchanges received digital assets valued at $23.59 million from wallets connected to these bankrupt companies, according to reports that surfaced on December 9.