Compilation: Felix, PANews

Recently, the latest development of the FTX bankruptcy case has caused debates and panic among some members of the encryption community. It is said that the creditors may only receive 10-15% of their assets, while the shareholders will 'forcefully grab' $230 million of assets ahead of the creditors. There are also rumors that FTX will start distributing repayment funds to creditors and customers on September 30. The FTX FTT Token has pumped over 80% within 24 hours, reaching a peak of $2.71 and currently trading at $2.14.

Newly Revised Bankruptcy Documents Anger the Public

According to the bankruptcy plan previously obtained with the "overwhelming preliminary support" of the creditors, 98% of the creditors will receive at least 118% of the value of the claims in cash.

However, on September 28th, Sunil Kavuri, the representative of FTX creditors, disclosed the latest revised bankruptcy documents on the X platform, and the refund amount is based on the value of Cryptocurrency at the time of FTX application, so creditors will actually receive "10% to 25% return of their Cryptocurrency". For example, at that time, BTC was only about 16,000 US dollars.

This decision has disappointed many creditors, and even sparked anger among FTX creditors.

Sunil Kavuri claims, "Debtor, the US Department of Justice, and Judge Kaplan confirmed that the Cryptocurrencyholder did not receive any compensation as of the filing date. Many FTX users continue to suffer from mental distress, panic disorders, divorce, and suicidal thoughts as their life savings were stolen and their property has not been returned."

The vast majority of FTX creditors agree with Kavuri's point of view. One user said, 'It's disgusting to sneak this in after the vote so late.' Another FTX creditor commented, 'I don't understand why the law cannot protect us investors,' describing FTX's collapse as an eyewash. One FTX creditor commented, 'Shameful, we have been fooled twice'.

FTX will allocate $230 million from government confiscation proceeds to shareholders.

Just as one wave subsides, another rises. Making things even more complicated is a new protocol disclosed, in which FTX Estate, led by Sullivan and Cromwell lawyers, will donate 18% of the proceeds from government confiscation actions to a special fund for the exclusive benefit of certain shareholders, with a maximum total of $230 million. Despite the protocol being officially executed on August 28th, nearly two weeks after the deadline for creditors to vote on the plan, the protocol was not announced until September 27th, which was also the last day for the estate to submit a revised plan.

Many creditors argue that this is not only unfair but also, considering the enormous financial losses they have suffered, even a 'criminal act'. Because in bankruptcy proceedings, creditors typically receive payment before shareholders, and when they voted overwhelmingly in favor of the plan before the August 16 deadline, they were unaware of this provision.

However, the document states: "The debtor and the preferred stockholders each hope to avoid the costs, expenses, and delays associated with litigation involving the plan and the seizure of proceeds."

FTX fund repayment will start on September 30th, which is a rumor.

It is worth mentioning that there are even rumors on social media that FTX will start distributing repayment funds to creditors and customers on September 30. FTT Token rose big pump. However, after verification, the statement is a rumor because the repayment plan has not yet been approved by the court and needs to wait for confirmation at the hearing.

The confirmation hearing for FTX's restructuring plan is currently scheduled to be held at 10:00 am Eastern Time on October 7th. At that time, Judge John Dorsey of the Bankruptcy Court of Delaware, USA, will decide whether to approve the plan. If the court confirms the plan, it will allow FTX to provide 'full interest-bearing' compensation to over 98% of customers and unsecured creditors based on the USD price of encryption assets on November 11, 2022.

According to the disclosure by Sunil Kavuri, a representative of creditors, on the X platform, there are approximately $5.5 billion in claims from non-encryption users, and it is expected that they will no longer invest in Crypto Assets in the future. Claimants with claim amounts below $50,000 may start receiving distribution by the end of 2024, while claimants with claim amounts exceeding $50,000 may have to wait until the first or second quarter of 2025 to receive distribution.

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