YEREVAN (CoinChapter.com) — FTX creditors are unhappy with the proposed Bitcoin repayment plan of the defuncted cryptocurrency exchange. According to reports, the exchange has decided to refund creditors at a $16,871 price per BTC instead of the current market value above the $40,000 mark.
Angered at what seems to be a lowball offer, they have filed an adversary lawsuit in Delaware against the exchange, seeking fair compensation for their funds.
Creditors claim funds belong to them, not FTX
The creditors, who have been waiting to get their funds from the FTX, insist that the funds held up by the exchange belong to them. Hence, they should be allowed to benefit from the price surges it has undergone.
Bitcoin price has surged extensively since November 2022, when the Sam Bankman-Fried-led exchange filed for bankruptcy. Back then, BTC traded below the $17,000 mark. That is the price point at which the exchange wants to refund them.
However, not having access to their funds has resulted in them losing out on the massive gains they could have reaped from the subsequent bull runs in the BTC price.
Creditors Sunil Kavuri, Ahmed Abd-El-Razek Noia Capital SARL, and Pat Rabitte, who have filed the suit, claim ownership over their funds. To back their claim, they have cited the terms and conditions of FTX which clearly stated that the funds deposited by the customers belong to them and not the exchange.
Kavuri revealed that FTX creditors are unhappy through a post on X (formerly Twitter).
However, there is no guarantee that the lawsuit will yield any results.
According to reports, Judge John T. Dorsey, the presiding judge in the case, has indicated that FTX could be go ahead as planned.
She cited US bankruptcy law, which mandates debts to be repaid based on their value at the time of the company’s bankruptcy filing, to justify her stance.
“I have no wiggle room on that. The Bankruptcy Code says what it says, and I am obligated to follow it,”
the judge said.
What happened to FTX 2.0?
Last year, reports broke that John Ray III, who took over as the new CEO of FTX after Sam Bankman-Fried led the firm to bankruptcy, was actively working to relaunch the exchange.
He had engaged in several meetings to garner investor support to reboot the operations of the embattled company.
However, such attempts have failed to materialize. According to a recent article by Reuters, FTX attorney Andy Dietderich revealed in court that all potential investors approached have refused to fund the exchange’s revival.
“FTX was an irresponsible sham created by a convicted felon. The costs and risks of creating a viable exchange from what Mr. Bankman-Fried left in a dumpster were simply too high,”
he told the court.
For the uninitiated, 12 jurors in November 2023 found Bankman-Fried guilty on seven counts. He faced multiple charges related to the exchange’s collapse. He now awaits sentencing in March.
