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FTX Debtors filed a revised reorganization plan and in this document, it was stated that customers’ crypto claims will be accorded the same value in cash as at the time of the bankruptcy filing. Markedly, the FTX Debtors’ estate laid out how bankruptcy claims in this case will be treated. They are led by lawyers of Sullivan &amp; Cromwell and John Ray III who <a href="https://thecoinrise.com/sam-bankman-fried-resigns-as-ftx-ceo-amid-bankruptcy-filing/" rel="noopener noreferrer nofollow">took over from Sam Bankman-Fried</a> as CEO of FTX.
Describing the work put into coming up with the proposal, FTX Debtors said “The Plan and this Disclosure Statement reflect many compromises to create the best, most equitable and economical outcome for all creditors and stakeholders in these Chapter 11 Cases.”
<h2 id="b-ftx-implosion-caused-a-broad-market-crash-b">FTX Implosion Caused a Broad Market Crash</h2>
FTX under the leadership of its former CEO filed for Chapter 11 bankruptcy on November 11th, 2022 after the exchange faced some insolvency issues. The unexpected crash of the Bahamian-headquartered cryptocurrency exchange led to the downfall of other crypto businesses, especially those involved with FTX like <a href="https://thecoinrise.com/blockfi-files-for-chapter-11-bankruptcy-in-new-jersey/" rel="noopener noreferrer nofollow">BlockFi</a>.&nbsp;
Similarly, the FTX implosion also caused a notable dip in the broad crypto market, leading to a price plunge of several cryptocurrencies and the broad crypto market capitalization.&nbsp;
<h2 id="b-cryptocurrencies-recover-by-over-100-b">Cryptocurrencies Recover by Over 100%</h2>
However, most of these crypto assets have recovered significantly since that time. The total crypto market cap which went down to $856 billion has since then come to 1.6 trillion today.
A clear example is Bitcoin (BTC) which was struggling between $16,000 and $17,0000 in November 2022. One year later, BTC is <a href="https://coinmarketcap.com/currencies/bitcoin/" rel="noopener noreferrer nofollow">currently trading at $41,621.75 </a>according to data from CoinMarketCap, implying a price recovery of more than 100%. The same situation applies to the likes of Ethereum (ETH), FTX token (FTT), Solana (SOL), Cardano (ADA) and others.
<h2 id="b-ftx-creditors-at-a-disadvantage-b">FTX Creditors At a Disadvantage&nbsp;</h2>
Looking at the general crypto market recovery, if the revised FTX reorganization plan is approved, <a href="https://thecoinrise.com/ftx-creditors-could-collect-up-to-40-of-their-investments/" rel="noopener noreferrer nofollow">creditors will be at a massive loss</a> as they would only receive about half of the current market value of their investments. One vocal FTX creditor identified as Sunil Kavuri pointed out that the proposal does not align with FTX’s Terms of Service says the titles to digital assets belong to customers and not the exchange.
“The reason SBF was convicted beyond reasonable doubt on all 7 counts was that he stole digital assets that were owned by FTX customers,” Kavuri added.
Noteworthy, the revised reorganization plan is still up for votes by certain designated creditors.
The post <a href="https://thecoinrise.com/ftx-debtors-submits-revised-reorganization-plan-for-creditors/" rel="noopener noreferrer nofollow">FTX Debtors Submits Revised Reorganization Plan For Creditors</a> appeared first on <a href="https://thecoinrise.com" rel="noopener noreferrer nofollow">Latest News and Insights on Blockchain, Cryptocurrency, and Investing</a>.

FTX Debtors Submits Revised Reorganization Plan For Creditors

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