- FTX proposed valuing crypto assets like Bitcoin, Ethereum, and Solana at prices from when it filed for bankruptcy in November 2022, which are far below current market prices.
- FTX says estimating claim values in dollars is needed to avoid delays, but creditors argue the proposed valuations significantly undervalue assets and urge customers to object.
- Creditors want FTX to use current crypto market prices to more accurately compensate customers, contending FTX’s valuations represent another “theft.”
FTX is seeking court approval to estimate its customers’ crypto asset claims in US dollars, according to a recent bankruptcy court filing. The exchange says this is necessary to avoid delays in the proceedings. However, FTX’s proposed valuations have stirred objections from creditors who argue they grossly undervalue assets.
FTX’s Proposed Crypto Asset Prices
FTX proposed valuing Bitcoin at $16,871, Ethereum at $1,258, and Solana at $16. The exchange also estimated Avalanche’s AVAX at $1,419. FTX says these prices represent the fair value of the assets as of November 11, 2022 when it filed for bankruptcy.
However, creditors note crypto prices have surged 40% or more since then. They say FTX’s estimates significantly undervalue assets compared to current market prices. For example, Bitcoin now trades above $40,000, Ethereum exceeds $2,200, and Solana is over $100.
Creditors Urge Customers to Object
Prominent FTX creditors are urging customers to fight the motion. They want claimants to write objection letters to the bankruptcy court judge before the January 11 deadline.
One creditor group said customers can send signed letters to the court, no lawyer needed. Creditors argue FTX’s valuations represent another “theft” and customers should get the full current value of their crypto assets.
FTX Says Estimates Needed to Avoid Delays
For its part, FTX says estimating claim values in dollars is essential to keep the bankruptcy process moving. The exchange argues liquidating each crypto asset claim separately would unduly delay the proceedings and is impractical.
FTX maintains its proposed valuations are fair and reasonable based on prices when it entered bankruptcy. However, creditors contend FTX should use current market prices to more accurately compensate customers. The coming days will see if customer objections gain traction in bankruptcy court.