Controversy and FTX, the defunct cryptocurrency exchange, have become two sides of the same coin since the course of its infamous bankruptcy claim. FTX is back in the headlines due to creditors’ dissension over the repayment plan set up by the exchange. According to a Reuters report, FTX is seeking U.S. Bankruptcy Judge John Dorsey to allow customers to vote on a repayment plan that claims to pay them back “in full.”
Previously, Judge Dorsey caused a stir among FTX customers by approving the defunct exchange’s use of the November 2022 crypto prices to settle debts instead of the current market price. To explain the reason behind his judgment, Judge Dorsey said, “I have no wiggle room on that. The Bankruptcy Code says what it says, and I am obligated to follow it.”
The creditors and customers fiercely rejected the settlement, arguing that it was unfair to receive assets at a lower price. Since the settlement judgment, multiple creditors have filed lawsuits against FTX outside of bankruptcy court, seeking the exchange to pay them in full at the current market price of their assets.
To give our readers further clarity, the price of Bitcoin in November 2022 was about $17k, whereas it is currently trading at $61k. So, if a customer had a balance of 1 Bitcoin, they would receive a settlement amount of $17k instead of the current market price of $61k.
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Numerous creditors urged the court not to allow voting on the bankruptcy plan due to its apparent flaws. They even claim that FTX’s voting forms are misleading the customer into believing that they will fully recover their lost funds. However, they will lose the real value of the asset that they could not sell since the exchange declared bankruptcy; this also takes away the profits as the Bitcoin price predictions show a bullish sentiment.
FTX CEO John Ray claims that former CEO Sam Bankman Fried has long stolen the funds the customers seek, and they cannot fully recover the lost assets. Ray said, “We cannot give tokens back that we never had.” cash payments are the only way to distribute the misproportioned assets back to the creditors.
The voting fiasco is just another twist in the infamous FTX saga, which remains the most memorable event in blockchain history. As customers still hope to reclaim their lost assets by fighting tooth and nail with the institutions, stay tuned to see how this story unfolds!
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Also Read: Analyst highlights three liquidity factors influencing the BTC price
