Creditor Demands FTX’s Debt Repayment in Cryptocurrency Over USD: A New Trend in Crypto World?

  • In a landmark decision, FTX, a bankrupt crypto exchange, has announced plans to repay all its creditors and customers, including interest. However, the proposed distribution plan has not been well received by all.
  • FTX creditor representative, Sunil Kavuri, has opposed the plan, advocating for debts to be settled in cryptocurrency rather than their dollar equivalent at the time of bankruptcy.
  • Kavuri has also alleged that Sullivan and Cromwell, the debtors, have caused substantial damage to FTX creditors, estimated to exceed $10 billion.

FTX, a bankrupt crypto exchange, plans to repay its creditors and customers. However, the proposed distribution plan has been met with opposition from FTX creditor representative, Sunil Kavuri, who advocates for debts to be settled in cryptocurrency.

FTX’s Proposed Compensation Plan

In a recent document, FTX disclosed its proposed distribution plan, which includes repaying all its creditors and customers with interest. This move has been appreciated by many in the crypto community. However, Sunil Kavuri, the FTX creditor representative, has opposed the plan. He believes that debts should be settled in cryptocurrency rather than their dollar equivalent at the time of bankruptcy.

Opposition from FTX Creditor Representative

Sunil Kavuri has urged stakeholders to vote against the proposed plan. He has highlighted several critical concerns, including the fact that Sullivan and Cromwell, the debtors, are indebted to FTX customers for the current value of their holdings, which is 3-10x the petition prices. Kavuri has also alleged that Sullivan and Cromwell have caused over $10 billion loss to creditors.

FTX’s Bankruptcy and the Crypto Market Rally

FTX filed for bankruptcy in November 2022, during the peak of the crypto winter. However, in 2023, the crypto market bounced back significantly, and so did the value of cryptocurrencies held by the exchange. FTX now plans to allocate the additional billions in cash reserves towards paying interest to its 2 million customers. This is a relatively uncommon outcome compared to typical bankruptcy settlements where creditors often receive minimal compensation.

Conclusion

The situation surrounding FTX’s bankruptcy and proposed distribution plan continues to develop. While the plan to repay all creditors and customers has been appreciated by many, it has also faced opposition. The final outcome will depend on the decisions made by stakeholders and the future performance of the crypto market.

Don't forget to enable notifications for our Twitter account and Telegram channel to stay informed about the latest cryptocurrency news.

BREAKING NEWS

US Bitcoin Spot ETF Sees $218.1 Million Net Inflow Despite BlackRock’s BBIT Outflow

On April 3rd, COINOTAG reported significant movements in the...

Bitcoin Sees $187 Million Net Inflow as Cryptocurrency Market Shows Significant Movements

According to recent data from Coinglass, reported on April...

US Ethereum Spot ETF Experiences $51.3 Million Net Outflow Amid Market Shifts

According to Farside monitoring, recent data on April 3rd...

Bitcoin Dominates as Altcoin Season Index Hits Yearly Low of 14

According to recent data from Coinmarketcap, the Altcoin Season...

ONDO Takes Lead in Binance’s Second-Phase Coin Listing Vote with 11.9% Support

On April 3rd, COINOTAG News reported the latest developments...
spot_imgspot_imgspot_img

Related Articles

spot_imgspot_imgspot_imgspot_img

Popular Categories

spot_imgspot_imgspot_img