Over the concerns of some customers who have requested greater repayments, FTX asked a judge on Tuesday to let customers of the bankrupt cryptocurrency exchange to vote on a liquidation plan that would pay them back in cash.
According to FTX attorney Andy Dietderich, getting to this point has been “a huge team effort” for the company, which has settled with multiple U.S. government agencies and sold off assets that it acquired with illegally obtained customer funds, including investments in real estate, venture capital funds, and cryptocurrency and other tech companies.
“Everybody was an involuntary investor in this crazy pool of assets, and our job was to turn it into cash,” Dietderich stated.
Dietderich recommended that John Dorsey, the U.S. Bankruptcy Judge, accept FTX’s legal documents outlining its proposal and allow for public vote on the liquidation plan.
FTX said it would pay back all customer claims in full and has garnered up to $16 billion to compensate customers since declaring bankruptcy, including around $12 billion in cash.
Some FTX consumers, however, contest the insolvent exchange’s claim of a “full recovery,” arguing that FTX will compensate clients based on significantly reduced cryptocurrency values as of November 2022, the date of the exchange’s bankruptcy declaration.
Although Dorsey has already given his approval to that method of evaluating claims, a lot of FTX users feel left out of the current surge in cryptocurrency values.
Clients who placed one bitcoin on FTX at the time of its bankruptcy will get around $16,800 in cash, as opposed to the current value of a bitcoin, which is approximately $60,000.
FTX customers who are upset have petitioned the court to stop voting on a bankruptcy plan that they believe is grossly faulty. They have also filed cases outside of bankruptcy court, demanding rulings that FTX never really had ownership of the customers’ deposits and that they be reimbursed in full at current value.
Creditors who oppose FTX’s proposed voting procedures contend that the company is intentionally misleading consumers by “breathlessly touting what they claim to be a full recovery with interest.”
