- The FTX claim window pricing has prompted concerns among creditors.
- The exchange’s official liquidator has issued a deadline for creditors to file claims ahead of distributions.
- The anticipated FTX creditor settlement is expected to commence by the end of the year.
Over the past year, bankrupt crypto exchange FTX has embarked on a journey to rectify the aftermath of the 2022 financial implosion, aiming to compensate creditors for the staggering $8 billion loss. The exchange’s efforts have recently gained momentum, marked by court approvals to liquidate major assets and the sale of its subsidiary firm to aid user payouts.
As expectations for repayments grow, FTX has revealed prices for the forthcoming distribution process. However, the disparity from the current market valuation had sparked confusion among creditors, prompting the question of potential further losses.
FTX Claims: A 2X Loss for Creditors?
According to the FTX claims window, Bitcoin (BTC) and other crypto assets to be distributed to creditors will be valued at the prices from November 2022, when FTX filed for bankruptcy. This sets a $16,871 value for Bitcoin (BTC), $1,258 for Ethereum (ETH), $286 for Binance Coin (BNB), and $16.24 for Solana (SOL).
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This marks a staggering gap with the current trading prices of each asset at press time, priced at $63,751, $3,470, $416, and $128.98, respectively. If distribution is facilitated in the USD equivalent of each asset, this could mark a staggering loss of 73.53% for Bitcoin holders, 63.8% for Ethereum Investors, 87.41% for Solana holders, and a 31.35% decrease for BNB.
While unlikely, investors could also see significant gains if the assets are repaid at the value held during the collapse. This could mean a 277.89% gain for Bitcoin investors, 175.74% for Ethereum, a 693.35% surge for Solana holders, and a 45.45% increase for BNB.
The question has sparked a debate among creditors and the broader cryptocurrency community, with varying perspectives on the potential outcomes for creditors. Amid this, an ultimatum has been issued to creditors to secure their places in the potential payout process.
FTX Claims Deadline
While the initial September 29, 2023 deadline for US claims filming has passed, the FTX Claim portal emphasized that the bar date in the Bahamas process remains open until 15 May 2024.
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This will allow for sufficient time to investigate and verify the legitimacy of individual claims ahead of the commencement of the settlements, scheduled for late 2024 or early 2025.
The portal highlighted that FTX Digital Markets has settled with FTX Trading Ltd. and its affiliated debtors, which will see the consolidation of assets to “ensure that customers in both proceedings receive substantially identical distributions at substantially identical times.”
FTX has recovered over $7 billion in assets to settle its debts to 9 million customers, and all eligible claims will be denominated in the US dollar.
On the Flipside
- The market position during payouts could further amplify the potential losses or gains for FTX creditors.
- FTX has recently suspended efforts to facilitate the revival of the exchange following unsuccessful bidding attempts with potential buyers.
- Sam Bankman-Fried (SBF), the founder and former CEO of FTX, is currently in the pursuit of a lenient sentence, following his conviction on multiple fraud and embezzlement charges.
Why This Matters
The approach adopted in the FTX repayment process is a double-edged sword, which could result in either substantial gains or losses for investors. This will significantly influence claimants financial positions, following a year-long pursuit of asset recovery.
Read more about the court’s greenlight of FTX to liquidate one of its largest assets:
FTX Cleared to Sell $837M Grayscale and Bitwise Shares
Discover the expected timeline for the upcoming Bitcoin halving and surging investor interest:
