Bankrupt crypto exchange FTX has ignited a firestorm of controversy with its proposal to significantly undervalue customers’ digital asset claims in its ongoing bankruptcy proceedings. The move unveiled in a December 27th court filing, seeks court approval to estimate the value of popular cryptocurrencies like Bitcoin, Ethereum, and Solana at a fraction of their current market prices.
A Deep Dive into the Discount:
- Bitcoin: FTX proposes valuing Bitcoin (BTC) at $16,871, a staggering 58% below its current trading price of over $40,000.
- Ethereum: Ethereum (ETH) would be pegged at $1,258, roughly 44% under its current value exceeding $2,200.
- Solana: Solana (SOL) faces an 84% haircut, with FTX suggesting a valuation of $16 compared to its current market price hovering above $100.
These proposed valuations stand in stark contrast to the recent, impressive rebound in the cryptocurrency market. Critics argue that FTX’s move unfairly disadvantages customers and potentially benefits insiders connected to the bankrupt exchange.
Fueling the Flames:
- Customer Backlash: FTX creditors, including prominent investor Sunil Kavuri, have vehemently condemned the proposal, urging customers to “fight” against it. They argue that the valuations grossly undervalue their assets and represent another form of “theft” by FTX.
- Community Calls to Action: Groups like the FTX 2.0 Coalition are advising customers to file formal objections to the motion with the Delaware bankruptcy court. They provide resources and guides to make the process accessible even without legal representation.
- Industry Voices Join the Fray: Financial experts like BnkToTheFuture CEO Simon Dixon are adding their voices to the chorus of disapproval, encouraging customers to “fight this hard.”
Uncertain Path Ahead:
The controversy surrounding FTX’s valuation proposal adds another layer of complexity to the already intricate bankruptcy proceedings. Customers have until January 11th to submit their objections, and the court’s eventual ruling will significantly impact their potential recoveries.
Also Read: Ripple Emerges as a Major Creditor in FTX Bankruptcy Case with $11.4 Million Claim
About The Author
