A US court has authorized the FTX bankruptcy vote plan despite objections from several creditors who seek current asset values.
FTX, a bankrupt cryptocurrency exchange, has been approved by a United States court to conduct a referendum on the most advantageous liquidation to its creditors. Despite previous opposition voices that have cited a downward payment of assets, creditors of the imploded exchange will vote on a liquidation plan.
FTX Creditors to Vote on Liquidation
A liquidation plan that aims to reimburse consumers in cash after several months will be decided by FTX creditors. The voting plan documents were authorized by bankruptcy judge John Dorsey, who also overruled the creditors’ objections. Andy Dietderich, an attorney at FTX, elucidated the process of achieving this stage, characterizing it as a significant collaborative endeavor. Some of the assets and investments the insolvent firm sold included real estate, venture funds, and other technology firms.
After its bankruptcy and collapse, the company has recouped approximately $16 billion to satisfy its creditors. These consist of $12 billion in cash, intended to be paid to consumers with interest. Several creditors contested the “full recovery” assertion, arguing that it is unjust because it is significantly lower than current values.
FTX, the second-largest digital asset exchange at the time, collapsed in November 2022, resulting in substantial market losses. The losses, which were estimated in billions, initiated a series of events that influenced market sentiments and crypto market regulation.
Not all creditors are satisfied
The plan was contested by several FTX creditors, who cited the disparity in crypto values between 2022 and the present due to the price increase this year. They contend that the recovery needs to be completed, and creditors will receive a payment less than the market value. Additionally, certain users have initiated legal proceedings asserting that FTX never possessed the assets and must reimburse their total value.
To provide context, crypto users who deposited one BTC on FTX before the insolvency will receive $16,800, the value at the time compared to the current market value of over $61,500. Angry creditors contend that the disparity is substantial and unjust, while the company maintains that it is the most effective course of action following the misappropriation of assets.
