According to a revised Chapter 11 plan of reorganization, FTX debtors have announced that they will assess the value of crypto claims by customers based on the market prices on the petition date. This means that the value of the crypto assets will be determined using a conversion table, taking into account the prices at the time when the bankruptcy petition was filed.
FTX, a major cryptocurrency exchange, filed for Chapter 11 bankruptcy protection in December 2021 after facing significant losses due to a security breach. The exchange has been working on a reorganization plan to repay its creditors and ensure the continuity of its operations.
The decision to assess the value of crypto claims based on petition date market prices is significant, as it provides a fair and transparent method for determining the value of the assets. This approach takes into account the fluctuations in the crypto market and ensures that customers are compensated based on the value of their assets at the time of the bankruptcy filing.
The use of a conversion table will make the valuation process simpler and more efficient, as it will provide a standardized method for assessing the value of different cryptocurrencies. This will help streamline the reorganization process and ensure that creditors are treated fairly.
Overall, the decision by FTX debtors to assess crypto claims based on petition date market prices is a positive step towards resolving the bankruptcy proceedings in a fair and transparent manner. It demonstrates the commitment of the exchange to repay its creditors and highlights the importance of accurate asset valuation in the crypto industry.
