In a surprising turn of events, the collapsed crypto exchange FTX has adjusted its payout plans, now indicating that crypto holders can expect to recover only 10-25% of their lost assets. The company has allocated $230 million from government forfeiture proceeds to benefit shareholders, with 18% of these funds designated for FTX equity holders, according to creditor-activist Sunil Kavuri.
This revised agreement has caught creditors off guard, as they were unaware of this provision. It was finalized after a creditor vote on a liquidation plan and disclosed 30 days past the original deadline. Traditionally, during Chapter 11 bankruptcy proceedings, shareholders are last in line for reimbursement after creditors. The filing emphasized the mutual interest of both debtors and preferred shareholders in avoiding the costs and delays associated with potential litigation regarding the plan and the forfeiture proceeds.
In a recent chat on X, Kavuri noted that “extra money is being transferred to shareholders,” while creditors will receive reimbursements based on the petition date when cryptocurrency prices were notably lower. For context, Bitcoin was valued at $16,000 at the time of filing but is currently trading at $64.47, causing frustration among FTX creditors.
Growing Outrage Among FTX Creditors
The changes to the payout plan have led to significant distress among FTX customers, many of whom feel that their life savings have been compromised without adequate restitution. Sunil reported that numerous creditors are experiencing mental distress and panic attacks due to the lack of asset recovery.
Social media platforms have seen a surge of criticism from FTX creditors, with one user expressing outrage over the late inclusion of these changes in the plan. Another commented that FTX has effectively scammed crypto holders “twice.”
FTT Token Surges Despite Controversy
Amidst the turmoil, the FTX token (FTT) has experienced a remarkable 60% increase in value over the past 24 hours, with trading volume skyrocketing by 3734%. This surge makes FTT the market’s biggest gainer at the moment, trading at $2.18. This is particularly striking given that the token had plummeted over 90% following the exposure of FTX’s fraudulent activities and its subsequent bankruptcy in 2022. Despite the recent rise, FTT is viewed by many as lacking intrinsic value.
