According to a report by Cointelegraph, several FTX customers have requested a US bankruptcy court judge to prevent the defunct cryptocurrency exchange from valuing their cryptocurrency deposits based on the prices in 2022. They believe that this practice hinders them from benefiting from the recent increase in cryptocurrency prices.
In support of the motion to estimate claims based on digital asset valuations, the Official Committee of Unsecured Creditors expressed a viewpoint that collective estimation of claim values is the most effective way to streamline the claims reconciliation process and expedite the confirmation of the Chapter 11 bankruptcy proceedings.
The debtor’s motion states that FTX plans to repay customers in US dollars based on the cryptocurrency market prices at the time of FTX’s bankruptcy filing in November 2022. Although FTX argues that US bankruptcy regulations require the use of that date to estimate claim values, customers believe that this method undervalues the cryptocurrency as it has significantly increased since the market lows of 2022.
FTX creditor Sunil Kavuri expressed on the X platform that his lawyers, Moskowitz and Boies, oppose the debtor’s motion to estimate claims. Cointelegraph contacted Kavuri to clarify whether the lawyers argue that customers should receive compensation in cryptocurrency form, to which Kavuri explained that the lawyers’ argument is that customers should “at least recover the value of the cryptocurrency” as the issue of ownership is still unresolved.
In addition to the Official Committee of Unsecured Creditors, FTX customers from around the world also submitted numerous similar letters questioning FTX’s valuation method to the US bankruptcy court before the deadline on Thursday. FTX aims to have its cryptocurrency price list approved at a court hearing scheduled for January 25th in Wilmington, Delaware.
Some customers argue that the proposal is unfair to holders of Bitcoin and other volatile assets, claiming that it favors stablecoin holders and external investors who obtained FTX bankruptcy claims at a lower cost.
In court documents dated December 27th, 2023, FTX stated that determining cryptocurrency prices based on the bankruptcy filing date is the only practical method to initiate customer repayments and mentioned that the court has allowed other bankrupt cryptocurrency companies such as Celsius, BlockFi, and Voyager Digital to assess customer claims using the bankruptcy filing date’s prices.
Related reports: “FTX valuation for claims has been determined, with a maximum recovery of $16 for 1 SOL! Objections must be filed by January 11th” “Various ‘payback lawsuits’ still pending! Legal experts: FTX bankruptcy case may take years to conclude” “FTX bankruptcy team to liquidate 35 properties in the Bahamas, proceeds to be used for repaying FTX customers”
