FTX Lenders Only Get ’10-25% Crypto Returns’ – Lender

FTX Lenders Only Get '10-25% Crypto Returns' - Lender


FTX lenders will only get 10-25% of their cryptocurrency, according to newly amended bankruptcy filings shared by FTX lender Sunil Kavuri.

The FTX lender-activist noted that when cryptocurrency prices were much lower than today, lenders would receive payments based on the date of the petition. To put this in perspective, the price of Bitcoin (BTC) was approximately $16,000 at the time of the legal petition.

The decision to return money to creditors and customers using the appeal date has sparked outrage among FTX creditors, Kavuri told Cointelegraph.

“Crypto holders are not fully valued at the date of the complaint as confirmed by the debtors, DOJ and Judge Kaplan. Many FTX clients are suffering from mental stress, panic, divorce and suicidal thoughts. No refund.”

Other FTX lenders and individuals have surprisingly echoed Kaveri's sentiments. It's disgusting that they sneaked into the plan so late after the vote, one user said. “I don't understand why the law doesn't protect investors,” asked another FTX lender, describing FTX's failure as a scam. “Shame, we got scammed twice!” said one FTX lender. he said.

Binance

Source: Sunil Kavuri.

Kavuri also argued that Sam Bankman-Fried violated the broadest meaning of FTX's terms of service and proprietary rights by using customer funds to pay unpaid debts:

“The fact that title to digital assets is owned by an FTX customer is a term of service ambiguity. Sam was convicted beyond a reasonable doubt of breaching the terms of service and using customer funds to pay off the Alameda loan and buy Robin Hood shares.”

On September 6, 2024, the FTX estate reached an agreement with Emergent Technologies – an entity formed by Bankman-Fried – to acquire $600 million in Robinhood shares to pay off creditors.

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Other challenges to the bankruptcy reorganization plan

Kavuri and his followers are far from the only ones opposed to FTX's asset restructuring plan. In the year In August 2024, a U.S.-based bankruptcy trustee challenged FTX's reorganization — a plan that would give trustees and representatives of FTX's bankruptcy estate far more legal protections.

In a legal filing, trustee Andrew Vara noted that these types of protections are unusual in similar circumstances and represent a shocking anomaly.

“Such immunity is far greater than that of bodyguards, whose work and compensation are subject to court approval and control over the course of the case.”

The United States Securities and Exchange Commission (SEC) has also indicated that they may oppose FTX's reorganization plan if the former crypto exchange chooses to repay customers with stable coin payments.

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