FTX Victims View Bankruptcy Process as 'Second Act of Theft,' File to Recover...

[ABCbits]

FTX Victims View Bankruptcy Process as 'Second Act of Theft,' File to Recover $8B in Forfeited Assets

FTX bankruptcy victims are seeking a ruling that the failed crypto exchange's forfeited assets, some $8 billion, belong to its customers, not the bankruptcy estate, according to a Friday filing in the U.S. District Court for the Southern District of New York.

Last month, the estate proposed a new reorganization plan that would see 98% of creditors get back 118% of their claims – in cash – within 60 days of court approval. The plan irked many of FTX customers, who had missed out on the opportunity to profit from the run-up in crypto prices while their funds were stuck in bankruptcy limbo... Read more here.


Not only denied of their potential profit, some FTX victim also has lower prioritization. Your opinion is greatly appreciated.

[Lucius]

I sympathize with the victims because of their loss, but at the same time I think that they should be realistic and understand that things like this take a very long time (years), and that the whole process cannot be completely honest. Of course, it's hard to live with the knowledge that something you had on that CEX is worth x9 or x4 today than when the collapse happened, but that whole disaster is the result of all those clients trusting one man who himself seemed very incapable of runs such a business, and that they used CEX for storage, not exclusively for trading.

The last part of the article only shows that the end is still far away...

“We don’t know what the damages will be because complete accounting has not been done,” Moskowitz told CoinDesk. While the fluctuating value of crypto might change things, “it is safe to say that over $8 billion” of damages are owed.

[Stompix]

Stupid question, actually more stupid questions...

- Do the users that had close to 4 billions in FTX tokens want to get paid in FTX token? Or the users that had shitcoins like ZEC for example which at the point of the crash was valued at $50 and now it's 20?
- If Bitcoin crashes back to 20k, so under the 118% fiat margin compared to that price would they still ask for their coins?

I understand everyone wants to get back the money and the profit but simply put there is no money there to satisfy everyone, so what do they want? Realistically how do they want to get money that has been already spent and will never come back out of the blue or with lawuits?

[Yamane_Keto]

With the increase in the value of cryptocurrencies and the increase in SOL, most customers may be able to recover their money in dollars after a long years of process, but in most cases they will not be paied using good crypto, it will be in USD or FTX, but rather their value will not be given priority over creditors and institutional bodies, even though their claims may be much less than the claims of those parties. They should push to try to get their money back in cryptocurrencies and this will be good compensation for the years they have waited.

[Captain Corporate]

I suppose that is what it will be used for anyway? I mean isn't that the whole point of it? It gets seized, and then it is shared to all the people who are owed? I do not get what the current situation is, compared to what they are requesting. Looking at the situation right now, the money is coming back, some %98 of it at least and I know that there is this missed chance topic there but at the end of the day they are getting their money back anyway. So I suppose it should not really be a big deal. They just need to wait a little longer, missing chances or not, and eventually they will get the money anyway.

[Baofeng]

I understand the argument of the victims, however, it is what it is, we really don't know what the future will bring, I agree with @Stompix, what if in their example, Solana didn't go up 9x or Bitcoin didn't go up 4x? So there are going to lose money anyways?

For me, I will take what the process will be, perhaps it will prioritized certain holders, but at the end of the day, if you are being paid then that's it. You can't really bring back time or have everything settled in your favor, just saying.

If they got back their money then re-invest it to a asset that they think will give them that potential returns.

[yhiaali3]

What happened has happened and there is no going back. Personally, if I were a victim of FTX, I would be satisfied with any amount I get instead of getting nothing or instead of being stuck in courts that may drag on for many years.

Stompix asked a very logical question

- If Bitcoin crashes back to 20k, so under the 118% fiat margin compared to that price would they still ask for their coins?

They certainly would not demand their assets according to the current price, but rather they would demand the value of their assets during the collapse of the exchange, so it would be better for them to accept a compromise according to the available circumstances.

[joniboini]

They certainly would not demand their assets according to the current price, but rather they would demand the value of their assets during the collapse of the exchange, so it would be better for them to accept a compromise according to the available circumstances.

Yeah, I think that's just how human nature is. They'll try to get as much benefit as possible, even though their argument sometimes sounds flawed. Some of them certainly get affected emotionally, so they can't think properly. I wouldn't be surprised if some are provoking some of these victims to increase their demands for various reasons. To be fair to them, losing a lot of money is never an easy thing. I'm not sure how I'd handle myself if I were one of those victims. Then again using centralized services should mean you know what you're getting into.

[TomPluz]

Well, this is the problem when dealing with a bankruptcy case...I think the same thing can also be said with similar cases except that this time around we are dealing with cryptocurrencies and not the usual fiat money. Certainly, there is a big time element with cryptocurrency and one can lost some good opportunities when implementation of a decision can be delayed for days. Now, while I am sympathizing with the FTX victims, we should note that the court is not making an exemption to expedite just because FTX was into the cryptocurrency business...there is the element of time that must be followed by all parties. For me, it is already good enough that victims will be paid accordingly though of course they all have the right - and I am really encouraging them of doing it - to demand something from the court which they feel they all deserve to get.  I am looking forward that in 2025 everything can be resolved with FTX so that all parties can move on.

[ABCbits]

Stompix asked a very logical question

- If Bitcoin crashes back to 20k, so under the 118% fiat margin compared to that price would they still ask for their coins?

They certainly would not demand their assets according to the current price, but rather they would demand the value of their assets during the collapse of the exchange, so it would be better for them to accept a compromise according to the available circumstances.

I agree, although don't forget that each victim have different plan with coin they supposed to own. I expect some of them either plan to sell soon or sell for really long time.

[yhiaali3]

@ABCbits, @joniboini
Of course, I sympathize with the victims of FTX, and I know that losing money is not easy, especially if the amount is large and takes years to accumulate. If I were in their place, I would try to get as much compensation as possible. I also know that each of them had a future plan for their assets, perhaps for a long time, to get the best. Price, but all this has changed now and is no longer useful.

What I mean is that a person must be dynamic in his life and adapt to difficult circumstances and not let his life stop there. For example, I was following DCA Bitcoin for about a year and then my wallet was hacked. What can I do? Nothing. I continued my life and started again trying Avoid my previous mistakes.

[Captain Corporate]

They are not losing the money though? Am I really missing something? Could someone help explain to me what is going on? I mean it is not paid out directly right away, that is true, but it is going to be slowly paid back, that is what this is about? I mean bankruptcy agreement means that they are going to be paid eventually, it will take a while, and the money will be used one way or another, but at the end of the day it is going to be fine, so they are going to get paid one way or another. I do understand that there are some questionable situations, like why not right away, but I think its going to be fine in the end and all could be paid by the looks of it.

[ABCbits]

@ABCbits, @joniboini
Of course, I sympathize with the victims of FTX, and I know that losing money is not easy, especially if the amount is large and takes years to accumulate. If I were in their place, I would try to get as much compensation as possible. I also know that each of them had a future plan for their assets, perhaps for a long time, to get the best. Price, but all this has changed now and is no longer useful.

What I mean is that a person must be dynamic in his life and adapt to difficult circumstances and not let his life stop there. For example, I was following DCA Bitcoin for about a year and then my wallet was hacked. What can I do? Nothing. I continued my life and started again trying Avoid my previous mistakes.

I get your point, although those FTX victims still have chance to recover some of their money.

They are not losing the money though? Am I really missing something? Could someone help explain to me what is going on? I mean it is not paid out directly right away, that is true, but it is going to be slowly paid back, that is what this is about? I mean bankruptcy agreement means that they are going to be paid eventually, it will take a while, and the money will be used one way or another, but at the end of the day it is going to be fine, so they are going to get paid one way or another. I do understand that there are some questionable situations, like why not right away, but I think its going to be fine in the end and all could be paid by the looks of it.

I think you missed these points stated on the news.

The court filing said FTX filed for bankruptcy during the so-called crypto winter, when cryptocurrency prices saw a dramatic drop. Measuring customer claims at that time value would be profoundly unfair, according to the filing, which said the price of Solana (SOL) has increased ninefold and the price of bitcoin quadrupled since the petition date.

The filing also points out that the bankruptcy code requires prioritizing certain creditors over others, such that holders of FTX’s FTT token are near the bottom of the priority list. "It is unlikely that holders of that token will receive compensation from the estate,” it said.

Most victim unable to get their potential profit, while few victim possibly not receive compensation.