FTX victims are fighting back against the bankruptcy of the crypto exchange, seeking to recover the $8 billion in forfeited assets that they believe belong to them, not the bankruptcy estate. The victims have filed a petition in a New York court, arguing that the bankruptcy code unfairly prioritizes certain creditors over others, leaving holders of FTX’s FTT token at the bottom of the list.
The bankruptcy process has left many FTX customers feeling “aggrieved and robbed,” according to the victims’ attorneys Adam Moskowitz and David Boies. They claim that former CEO Sam Bankman-Fried, also known as SBF, stole at least $8 billion from customers, leading to the collapse of FTX in November 2022. SBF was sentenced to 25 years in prison for fraud and ordered to forfeit $11 billion, but he plans to appeal his sentence and conviction.
The victims argue that if not for SBF’s crimes, they would still own their crypto investments today. The filing highlights the significant increase in the value of cryptocurrencies like Solana (SOL) and bitcoin since the bankruptcy petition date, making it unfair to measure customer claims based on the prices during the crypto winter.
The proposed reorganization plan by the bankruptcy estate, which promises to return 98% of creditors’ claims in cash within 60 days of court approval, has sparked backlash from the victims. They believe that the plan does not adequately compensate them for the losses they suffered while their funds were stuck in bankruptcy limbo.
Moskowitz stated that the damages owed to the victims are likely to exceed $8 billion, but a complete accounting has yet to be done. The filing warns that holders of FTX’s FTT token may not receive any compensation from the estate, given their low priority in the bankruptcy code.
Overall, the FTX victims are determined to fight for their rights and recover the assets they believe rightfully belong to them. Their battle against the bankruptcy estate continues as they seek justice and fair compensation for the losses they endured. The outcome of this legal dispute will have significant implications for the future of customer protection in the crypto industry.
