FTX’s Proposed Reorganization Plan Offers Repayment and Interest, Faces Criticism
Alameda Research recently transferred a total of $12 million worth of cryptocurrency through two wallets associated with the sister trading firm of the bankrupt FTX exchange. On June 11, PeckShield reported that an Alameda Research address transferred 5,000 vBTC, valued at over $2 million, to the algorithmic trading firm Wintermute. Additionally, another Alameda-related wallet transferred 10 million WBTC, worth over $5.2 million, to Binance.
The reasons behind these transactions are unclear but coincide with notable transfers that took place a month earlier. On May 6, PeckShield noted that two wallets linked to FTX and Alameda Research moved $8.3 million worth of crypto. Specifically, the FTX-associated address transferred 860 Tether Gold (XAUT), worth over $2 million, to Wintermute. Meanwhile, an Alameda-related wallet transferred Ethereum worth $6.3 million to two unknown addresses.
These transfers come at a time when creditors of the bankrupt FTX exchange have raised objections to the platform’s proposed reorganization plan. On June 6, FTX creditor activist Sunil Kavuri tweeted that the objection focuses on the plan’s failure to meet certain requirements of the Bankruptcy Code. Creditors argue that the reorganization plan overlooks property rights issues, fails to meet the best interest test, and contains inconsistent debtor liquidation analysis.
The objection was made following FTX’s announcement on May 7 that it had secured more funds than necessary to repay creditors and complete its bankruptcy process. Despite customers and other affected parties losing approximately $11 billion when FTX collapsed in 2022, the bankruptcy estate has accumulated over $16 billion from asset sales and fund consolidation across various entities.
According to the proposed reorganization plan, FTX would pay 98% of creditors with claims under $50,000 approximately 118% of their allowed claims within 60 days of plan approval. Non-governmental creditors would receive 100% of their claims plus an additional 9% interest payment. While the crypto community has mostly responded positively to this proposal, some creditors have expressed dissatisfaction with its terms.
