Miguel Lopez On December 27, 2023, the FTX debtors presented a revised valuation of digital asset claims. This new valuation proposes converting the claims into U.S. dollar amounts, referencing the value of cryptocurrencies as of November 11, 2022. For instance, under this proposal, a bitcoin holder with assets in FTX would be compensated $16,871 for each coin, a stark contrast to bitcoin’s current market value of $42,800.
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Proposed Valuation in FTX Bankruptcy Case Draws Discontent Among Creditors
The FTX estate’s new proposal for estimating the value of claims has not been well-received by affected parties. According to the latest documents from FTX, the “Digital Asset Conversion Table” follows section 502(b) of the bankruptcy code. This section dictates that claims should be evaluated based on the value at the time of the Chapter 11 filing.
FTX has referenced the application of a similar valuation method in other cryptocurrency bankruptcy cases, including Blockfi, Voyager Digital, and the Celsius Network. The estate insists on the court’s approval of this “digital asset conversion table,” which notably sets bitcoin’s value at $16,871, based on exchange rates from November 11, 2022, despite its current market value of $42,800.
Other cryptocurrencies are similarly affected, with ETH valued at $1,258 per unit (against a present value of $2,396) and SOL at $16.24, despite its current $100 valuation. Lower values are also set for DASH and BCH, with DASH at $35.51 and BCH at $102.21, both below their current market rates.
This valuation affects all digital assets in FTX’s holdings, inclusive of those under vesting. Clients have a deadline of January 11, 2024, to challenge these valuations. The FTX 2.0 Customer Coalition, also known as the X account, is assisting individuals with the objection process. Their spokesperson stated, “Many are inquiring about the objection procedure. Anyone can file an objection by sending a signed letter to the Delaware bankruptcy court, without needing legal representation.”
Cherokee Acquisition’s Claims Market indicates that FTX claims are currently trading at 67 cents on the dollar, with sellers asking for 72 cents. This market is also active in trading claims from other major crypto bankruptcy cases like Celsius and Blockfi, involving substantial amounts of money.
We invite you to share your perspectives on the FTX estate’s decision to use the November 11, 2022, cryptocurrency values for their digital asset conversion table. Please express your views and opinions on this matter in the comments section.
Frequently Asked Questions (FAQs) about FTX bankruptcy valuation
What is the FTX Estate’s Proposal in Their Bankruptcy Proceedings?
The FTX Estate proposes converting digital asset claims into U.S. dollars, based on cryptocurrency values as of November 11, 2022. This impacts the valuation of assets like Bitcoin, ETH, SOL, DASH, and BCH, potentially resulting in lower payouts to creditors.
How Does the FTX Proposal Affect Bitcoin Holders?
Under the proposal, Bitcoin holders with assets in FTX would receive $16,871 for each coin, significantly lower than the current market value of $42,800 per Bitcoin.
What is the “Digital Asset Conversion Table” in FTX’s Bankruptcy Case?
The Digital Asset Conversion Table is a part of the FTX Estate’s bankruptcy proceedings, setting the value of cryptocurrencies based on their prices as of November 11, 2022, as per section 502(b) of the bankruptcy code.
How Can Creditors Contest the Valuation Proposed by FTX?
Creditors have until January 11, 2024, to challenge the proposed valuations. They can file objections by sending a signed letter to the Delaware bankruptcy court without needing a lawyer.
What is the Current Trading Value of FTX Claims?
As per Cherokee Acquisition’s Claims Market, FTX claims are trading at approximately $0.67 on the dollar, with asking prices around $0.72.
More about FTX bankruptcy valuation
- Understanding FTX Bankruptcy Proceedings
- Impact of FTX Valuation on Bitcoin
- Guide to FTX’s Digital Asset Conversion Table
- How to Object to FTX Estate Valuations
- Market Trends for FTX Claims Trading
6 comments
can anyone tell if there’s a way to get more than what they’re offering? just seems low compared to current prices.
It’s a mess but kinda expected in bankruptcy. Just hoping for a fair outcome for all, fingers crossed.
Seriously, FTX using Nov 11 rates?? the market’s changed so much since then! They should update the rates.
this is why i never trustd big crypto platforms.. all smoke and mirrors until something goes wrong.
wow, FTX really playing hardball with these valuations? Feel bad for those who invested, not fair to them.
first time following a crypto bankruptcy. It’s all so complicated, how do people keep up with this stuff?