A projected value of claims relating to digital assets was released by the FTX crypto exchange on December 27th, 2023.
The proposal suggested that the claims be converted into dollar amounts in accordance with the crypto asset values on November 11th, 2023.
This means that someone who held Bitcoin on the FTX crypto exchange would receive dollar amounts of $16,871 for every token, rather than its current value of $42,800.
The proposal
People holding funds on the FTX exchange and now dealing with the bankruptcy process are not happy with the proposed claims estimates that debtors have presented.
The FTX estate presented documentation showing that in accordance with the 502(b) section of the bankruptcy code, the Digital Asset Conversion Table will assess claims at the time of the bankruptcy filing.
According to FTX, other crypto-related bankruptcy cases have also used the same approach for claims valuation, such as Celsius Network, Voyager Digital and BlockFi.
The FTX estate has asserted that the ‘digital asset conversion table’ should be endorsed by the court. This table uses the value of cryptocurrencies as of November 11th, 2022.
Therefore, even though Bitcoin is currently trading at $42,800, it would be valued at $16,781 because this was its price at the time of the Chapter 11 filing.
Other tokens
This means that rather than the value of $2,396, which is its current price, ETH holders would be given $1,258 per token.
Likewise, the SOL token is currently valued at $100, but its price is set at $16.24. Similarly, DASH is listed at $35.51 and BCH is listed at $102.21, even though their current prices are significantly higher.
This extensive list comprises all the digital assets held on the FTX crypto exchange, including those investing periods.
The details
Clients can contest these valuations until January 11th, 2023 and details of the objection protocol have been shared on the X account, which is called ‘FTX 2.0 Customer Coalition’.
The group’s spokesperson said that many people were inquiring about the objection procedure. They said that a lawyer is not required for the process.
A signed letter can be sent to the Delaware bankruptcy court by anyone who has an objection. A Cherokee Acquisition subsidiary, Claims Market facilitates the sale of bankruptcy claims.
It revealed that claims of the FTX crypto exchange are trading at $0.67 on the dollar, with $0.72 being demanded by the settlers.
The platform is used not just for trading FTX claims, but also of other prominent crypto bankruptcy cases, such as BlockFi and Celsius Network. This means that millions of dollars are moved in terms of claims.