FTX Files Amended Plan to Pay Creditors Amid Soaring Legal Expenses
On Dec. 18, it was reported that FTX had filed its latest proposal to return billions of dollars to its customers and creditors.
Moreover, the plan did not indicate whether the exchange would be restarted. It will be sent to creditors for a vote before being submitted to court for final approval.
The payout plan calls for billions of dollars to be distributed as cash after the firm liquidated a lot of its crypto holdings, according to Bloomberg.
According to the amended Chapter 11 plan of reorganization filed on Dec. 16, customer claims for crypto assets should be valued at the time of the exchange’s collapse in November 2022.
FTX Legal Fees Raise Eyebrows
CHEV partner Adam Cochran said that this “should be illegal,”
“So if you had 1 BTC they’ll be paying you $17k instead of 1 BTC – even though most of their recovery has been in crypto or stock assets that went up?! This should be illegal. Your title rights should be protected first.”
He added that it was shameful not to recognize property rights because the asset is digital. “If you tax it like property, treat it like property,” he said.
Another thing that has raised eyebrows is FTX’s ongoing legal expenses.
On Dec. 17, Casa HODL co-founder Jameson Lopp commented on the firm’s monumental legal fees. He observed that the customer shortfall and legal fees were similar amounts at around $1.4 billion.
FTX has a phalanx of lawyers, accountants, paralegals, and finance advisors on the payroll, costing as much as $1.5 million per day.
Latest numbers from the FTX bankruptcy are interesting:
Customer shortfall: $1.422 Billion
Bankruptcy fees: $1.45 Billion pic.twitter.com/FhCtFPeQ3z— Jameson Lopp (@lopp) December 17, 2023
Crypto Spaces host MartyParty added that this was the real scam, “Gary Gensler, who did you protect?” he asked.
Furthermore, the US Internal Revenue Service (IRS) is attempting to collect $24 billion in unpaid taxes from the bankrupt crypto exchange, which could further reduce the amounts left over for creditors.
FTT Price Outlook
Despite the news, the FTX native token is bucking the market trend today. FTT has made 5% on the day to reach $3.74 at the time of writing, according to CoinGecko.
The token went on a tear in early November, jumping 380% from $1.15 to top out at $5.50 on Dec.11, but it has retreated sharply since.
Moreover, FTT remains down 95% from its September 2021 peak of $84.
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