Since the collapse of FTX in late 2022, a lot of people have been left in the lurch with their investments hanging by a thread. But now, FTX’s lawyers say that they plan to give back that money to at least 98% of their erstwhile customers.
Despite FTX’s announcement that they will return debtors’ money in dollars, not everyone’s happy about it. Many folks who lost money had invested in cryptocurrency, not cash. They worry that if FTX gives them dollars, they might miss out if the value of crypto goes up later on.
As per FTX’s plan, the creditors holding claims of $50,000 or less will fall in the “convenience class” category wherein they will receive 118% of their claims within 60 days of the plan getting into effect. FTX believes that the “convenience class” plan will cover 98% of its debtors.
However, this plan needs approval from a Delaware court as the case is sub-judice.
Recently, FTX customers received an email from “claims@ftx.pwc.com”(instead of Kroll mail) regarding the claims process. Some users have noticed that when converting their COIN holdings to USD, FTX calculates the value based on the lowest rates at the time of their bankruptcy. This means that even if the current value of their COINs is higher, they are being offered a significantly lower amount in USD.
For example, according to this calculation, someone with $40,000 worth of COINs might be forced to accept only $16,000.
Why are creditors furious about this decision?
Customers are raising concerns about the fairness of this approach. They argue that since they held cryptocurrency on FTX.com, ans not USD currency, they should receive the exact value of their assets back.
This has led to questions about the nature of this “payback” process. Many feel it’s more akin to another loss rather than a true payback. Some even call it robbery.
One Reddit user named Ronitovi expressed his anger stating, “this is not a payback – this is just another robbery over the incident.”
Customers are wondering if there’s a way to bypass this system, or if they reject the offered amount, will they end up with nothing? Additionally, they are considering their legal options, asking if they have the right to sue over this matter.
Since the collapse, the value of cryptocurrencies like Bitcoin has gone up a lot. For example, when FTX went down, Bitcoin was worth less than $20,000. Now it’s worth over $62,000. So, even though customers will get their money back, they won’t get back the potential profits they could have made if their Bitcoin had kept growing in value.
Also Read: FTX FTT Soars 37% Amid Repayment to Creditors Proposal
