On September 29, 2024, FTX creditors learned they may recover only 10-25% of their cryptocurrency holdings, according to revised bankruptcy documents. This revelation, shared by creditor Sunil Kavuri, highlights that reimbursements will be calculated based on the petition date when Bitcoin was valued around $16,000, significantly lower than current prices.
The decision to use outdated prices for reimbursements has incited outrage among creditors, many of whom are experiencing severe emotional distress due to their losses. Kavuri emphasized that the situation is unfair, stating, 'Crypto holders are not whole at petition date prices.'
Additionally, Kavuri accused former CEO Sam Bankman-Fried of violating FTX's terms of service by misusing client funds to settle debts. On September 6, 2024, the FTX estate secured a deal to obtain $600 million in Robinhood shares to assist in paying creditors.
Challenges to the bankruptcy plan continue, with trustee Andrew Vara arguing that the protections granted to FTX administrators are excessive and atypical. The SEC has also indicated potential objections if client reimbursements are made in stablecoins.