- Possible Fund Recovery for FTX Creditors
- Community Reaction and Commentary
- Liquidation Plan and Asset Recovery
FTX creditors are hopeful to recover part of their crypto assets amidst recent controversies over fund distribution.
Possible Fund Recovery for FTX Creditors
Sunil Kavuri, an activist representing FTX creditors, estimated in an X post that customers and investors could recover about 10-25% of their crypto assets. The recent announcement that the exchange will distribute about $230 million to its shareholders, which is around 18% of its available funds, has sparked mixed reactions.
Community Reaction and Commentary
FTX creditor and Bitcoin maximalist Crypto Notte expressed his disapproval over the fund distribution: '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.' Notte also criticized the US bankruptcy system, calling it a 'joke'. In another post, he commented that the $230 million being handed to shareholders seemed like a considerable sum.
Liquidation Plan and Asset Recovery
FTX is awaiting a court hearing on its reorganization plan on October 7. The plan includes a liquidation structure that will allow for repayments to the creditors. According to FTX, over 95% of creditors who voted on the amended plan supported it. However, some creditors, including Sunil Kavuri, have filed an objection to the wind-down plan, arguing that it could exacerbate customer suffering by imposing taxes on the assets received.
Discussions around fund recovery for FTX creditors are ongoing, with a court hearing for the reorganization plan set for October 7.
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