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FTX creditor campaigner Sunil Kaviri claims that consumers of the exchange can get between 10% and 25% of their crypto backoff. Some find it alarming that the update comes as the now-defunct exchange sends 18% of the forfeiture money ($230 million) to equity holders, or shareholders.
“Just a quick estimate of how much petition date is going to pay us versus current value,” the activist said.
The report falls amid boiling excitement about FTX starting October distributing $16 billion to its creditors. Especially, this is yet unverified since court confirmation is still pending on the choice of restructuring for the clients of the exchange. October 7 is the court hearing day assigned for this.
“The decision regarding the restructuring plan for FTX customers will not be made until October 7. Because the court hearing related to it is scheduled for that date. Personally, I could not find any information about what form of repayment it will be, crypto or cash, and this is very important in the context of withdrawals from the cryptocurrency market,” CryptoTrail stated.
It comes barely two months after the court decided on a $12.7 billion payback schedule. Still, the court barred FTX and Alameda Research, its affiliate, from trading digital assets and did not impose any civil monetary punishment. After a US trustee protested, claiming more fair distribution among creditors, the reorganization proposal remains under debate. Sunil Kaviri, among FTX creditors, had also objected to the reorganization plan prior to the US Trustee’s intervention. The main points of dispute are that the plan lacks in-kind client distribution choices and has extensive exculpation clauses.
“It is painfully apparent that the Debtors’ proposed plan will inflict additional hardships on customers through forced taxation that could be avoided by making an ‘in kind’ distribution,” the creditors said.
The US Securities and Exchange Commission (SEC) questioned the strategy in a similar vein. It called for changes, including eliminating the discharge clause. Should the exchange fail to implement these modifications, the securities regulator promised to oppose the confirmation of the scheme.
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