A formal motion has been submitted to the U.S. Bankruptcy Court for the District of Delaware to resolve an issue that has confounded bankrupt crypto exchange FTX FTT/USD and its affiliated debtors.
What Happened: The motion aims to establish a standardized method for valuing claims, converting the quantities of digital assets into dollar values as of Nov. 11, 2022 — the date FTX went bankrupt.
The motion, filed on Dec. 27, 2023, is a critical step in advancing the debtors' Chapter 11 cases, allowing for a clearer understanding of the value of claims and facilitating the plan confirmation process.
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The motion addresses the unique challenge posed by the nature of claims in the FTX bankruptcy, predominantly based on various digital assets.
Why It Matters: This move to estimate claims is seen as necessary to avoid delaying the administration of the bankruptcy case, a situation where individual liquidation of each claim would be impractical and time-consuming.
According to the document, a "Digital Assets Conversion Table" proposes the dollar value of various digital assets as of the petition date. This table will serve as the basis for converting digital asset quantities into U.S. dollar amounts.
The proposed values have been determined considering several factors, including the practicality of asset liquidation.
The Court has set a deadline of Jan. 11, 2024, for objections to the motion.
A hearing on the matter is scheduled for Jan. 25, 2024.
This motion, if approved, will significantly impact how customer claims are valued and how distributions under the plan are calculated.
FTX's bankruptcy case has been closely watched for its potential implications on the digital asset market and regulatory landscape.
This latest move marks a crucial step in addressing the complexities associated with the valuation of digital assets in bankruptcy proceedings.
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