According to a report by Cointelegraph, several FTX customers have requested a US bankruptcy court judge to prevent the now-defunct cryptocurrency exchange from valuing their crypto deposits at 2022 prices, arguing that this practice hinders them from benefiting from recent price increases.
In support of the debtors’ motion to estimate claims based on digital assets, the Unsecured Creditors Committee expressed a view that collective estimation of claim values as proposed in the motion is the most effective way to streamline the claims reconciliation process and expedite the Chapter 11 bankruptcy process confirmation.
The debtors’ motion states that according to the bankruptcy plan, FTX plans to repay customers in US dollars based on the cryptocurrency market prices at the time of FTX’s bankruptcy application in November 2022. Despite FTX arguing that US bankruptcy regulations require using that date to estimate claim values, customers believe this method undervalues cryptocurrencies as they have significantly appreciated since the market lows of 2022.
FTX creditor Sunil Kavuri, on the X platform, stated that his lawyers Moskowitz and Boies oppose the debtors’ motion to estimate claims. When contacted by Cointelegraph, Kavuri clarified whether the lawyers advocate for customers to receive compensation in cryptocurrency, explaining that the lawyers’ argument is that customers should “at least recover the value of the cryptocurrency” as property rights issues remain unresolved.
In addition to the Unsecured Creditors Committee, FTX customers from around the world submitted a large number of similar letters to the US bankruptcy court before the deadline on Thursday questioning FTX’s valuation method. FTX aims to have its cryptocurrency price list approved at a court hearing scheduled for January 25 in Wilmington, Delaware.
Some customers argue that the proposal is unfair to holders of Bitcoin and other volatile assets, claiming that it favors stablecoin holders and external investors who acquired FTX bankruptcy claims at lower costs.
In a court filing dated December 27, 2023, FTX stated that determining cryptocurrency prices based on the bankruptcy application date is the only practical way to initiate customer repayments and mentioned that the court had allowed other bankrupt cryptocurrency companies such as Celsius, BlockFi, and Voyager Digital to assess customer claims using prices from the bankruptcy application date.
Related reports: “SOL can recover up to $16! FTX claims valuation has been confirmed, objections must be filed by January 11” “Various ‘money lawsuits’ still pending! Legal experts: FTX bankruptcy case may take several years to conclude” “FTX bankruptcy team will liquidate 35 properties in the Bahamas, proceeds will be used to repay FTX customers”