FTX Debtors Reveal Bitcoin Price Proposal – Is It A Risky Move Or A Smart Strategy?
Now-bankrupt cryptocurrency exchange FTX is facing legal challenges from customers over the assessment of digital asset claims.
Recent court filings show that FTX is seeking approval to assess customer claims in U.S. dollars based on cryptocurrency prices as of November 11, 2022, the bankruptcy date. The move has drawn criticism from creditors who say the proposed valuation is significantly undervalued. their digital assets.
Customers rally against claims of undervalued cryptocurrency
Court documents dated December 27 detail FTX’s proposal to value Bitcoin at $16,871 and Ethereum at $1,258, while Solana (SOL) and Avalanche (AVAX) are valued at $16 and $14.19, respectively. It’s a dollar. Stablecoins such as USDT, TUSD, and BUSD are also quoted slightly below their typical $1 value. FTX’s creditors, including FTX’s major creditors, condemned the assessment, calling it a gross understatement and urging other clients to oppose the motion.
Call for action for affected customers
Prominent creditor Sunil Kavuri and others in the FTX community are urging customers to actively contest this valuation. The FTX 2.0 Coalition, which represents a group of creditors, advised clients wishing to challenge the plan to write directly to the judge overseeing the bankruptcy case. This guidance emphasizes that you do not need legal representation to make objections to the court.
Discrepancies in digital asset valuation
FTX’s filing sets out the value of approximately 500 digital assets, including major cryptocurrencies and various tokenized assets. However, the listing prices – $16,871 for Bitcoin and $1,258 for Ethereum – are significantly lower than the market value at the time of the FTX collapse. This offering excludes the expected price of the FTX token (FTT) but includes leveraged tokens, tokenized stocks, spot derivatives, and cryptocurrency futures.
If the court approves FTX’s valuation plan, many cryptocurrency holders could miss out on potential profits from their digital assets. The values offered, based on interest rates at the bankruptcy date, may not accurately reflect current market conditions.
Customers who disagree with the proposed valuation have until January 11 to object, highlighting a critical window for those seeking to challenge the exchange’s estimates.