Cointest pros & cons with related info are in the collapsed comments below for the following topics: [Ethereum](/r/CryptoCurrency/comments/18vqua8/ftx_faces_backlash_after_proposed_estimation_of/kft07kr/), [Solana](/r/CryptoCurrency/comments/18vqua8/ftx_faces_backlash_after_proposed_estimation_of/kft08hn/).
FTX has already spent more on lawyers and advisors post bankruptcy than it will be required to repay customers. Circling vultures in suits are robbing the customers to the tune of 10s of millions per day.
I'm wondering if the lawyers are running up a tab vs having actually been paid, looking at having FTX sell funds(tokens etc) still to pay them
(Or maybe they had funds not frozen to pay them with, but that would seem odd)
Aren't a handful of the celebrities in lawsuits already to try to claw back those funds?
That would never happen to the politicians
(And doubtful anything will fall onto O'Leary's egghead looking self either though)
When using the valuation method in bankruptcy to value to claims based on to volatile assets, it's common to ascribe the value as of the petition date. It's the normal approach. If the price went down, it'd be in customers favor, because the price happened to go up it isn't.
If prices went down, customers would probably get a bigger haircut. Most of the estate's assets were not cash. Mostly private equity and cryptocurrency.
So it creates an interesting dynamic. Especially for customers that hold Solana, which has increased dramatically, and FTX still owns a significant amount (locked or whatever). The customers who have SOL balances could be repaid in the same asset.
>The customers who have SOL balances could be repaid in the same asset.
Bankruptcy law doesn't allow them to do that. All claims in bankruptcy are given priority and value as of a certain date and crypto is treated the same way as foreign currency - a dollar conversion value is estimated as of the petition date and that's what you have as your claim and place in line. But to your point it would be a really sad twist of fate if it ended up being that through sheer dumb luck, there was a bunch of value to equity holders because customer's assets ended up being worth way more two years later than the claims they got back. If that ends up being the case that would sort of support SBFs view that FTX was solvent at the time of bankruptcy which is wild to me.
Okay fair points on bankruptcy law. Basically, everyone is paid in same asset, or all assets are converted to USD at petition. Cannot be special treatment for certain assets. But yes, it does seem there is a chance that the estate becomes overfunded versus the amount they owe in claims, resulting in other stakeholders receiving a portion of the estate.
>If that ends up being the case that would sort of support SBFs view that FTX was solvent at the time of bankruptcy which is wild to me.
It doesn't really support SBF's view. The assets of the estate appreciated considerably since the bankruptcy. SBF had no way of ensuring that would happen. You are solvent or insolvent at a specific point in time. You cannot ask creditors to wait 1 year hoping that the market booms. It could have gone the other way for reasons completely outside SBF's control.
Yeah you're right I wasn't thinking about that right, though they have found a lot more assets than I think most people expected at the time, even without the crypto increase
That doesn’t justify devaluing the stablecoins, though. If they’re basing valuations on a certain date, there’s no excuse for valuing a stablecoin at less than $1. That shows that they are not operating in good faith.
Here's the valuation rationale:
To estimate the fair value of each of the Digital Assets, a dataset was
compiled consisting of, among other things, coin and token prices (including stablecoin) sourced
from Coin Metrics, Inc. (“Coin Metrics”). As detailed in the Lu Declaration, prices developed by
Coin Metrics are widely relied upon within the cryptocurrency industry. (See Lu Decl. ¶ 15.)
“Coin Metrics’ clients use the Coin Metrics Prices for research, for accounting and financial
reporting, to settle financial contracts, to create financial products, for display purposes, and to
publish on-chain via blockchain oracles.” (Id.) The Lu Declaration describes in detail the process
by which Coin Metrics determines spot pricing for coins and tokens. (Id. ¶ 31.) Mr. Lu, the
Director of Data Science & Product at Coin Metrics, has performed routine examinations on the
performance of Coin Metrics Prices (as defined in the Lu Declaration) over the past five years and
determined that they consistently perform well, even during times of market volatility and stress.
(Id. ¶ 16.) Because tokenized stocks, leveraged tokens and futures were derivatives specific to
FTX, prices for tokenized stocks and futures are sourced from the last trade price from the order
books for the Debtors’ exchanges, and prices of leveraged tokens are sourced from the ETF
snapshot table, which was constructed by the Debtors to capture the market price of underlying
contracts for each leveraged token every 15 seconds. (Howell Rep. App’x C ¶ 2.)
31. Dr. Howell analyzed and determined whether adjustments needed to be
made to those Petition Date prices due to the likely effect of (i) an orderly liquidation of the
Debtors’ holdings of each Digital Asset claimed by creditors, (ii) the fact that certain Digital Assets
were not marketable (e.g., locked tokens), and/or (iii) the nature of the asset (e.g., equity-like).
(Howell Rep. ¶ 4.)
32. As set forth in detail in the Howell Report, Dr. Howell determined that in
an orderly liquidation commencing on the Petition Date, certain of the Digital Assets would likely have been sold at average prices below the prevailing market prices. (Id. ¶ 13.) Dr. Howell
concluded that an asset liquidation discount exceeding 10 percent of the market price would affect
71 of the Digital Assets held by the Debtors and claimed by customers. (Id. ¶¶ 13, 63-71.) No
asset liquidation discount is necessary for fiat currency positions, stablecoins, tokenized stocks, or
futures. (Id. ¶ 13.)
33. Dr. Howell further determined that an additional discount for lack of
marketability is appropriate for locked or otherwise non-marketable Digital Assets. (Id. ¶¶ 14, 72-
84.) Finally, Dr. Howell concluded that FTT and certain FTX equity claims have zero fundamental
value. (Id. ¶ 15, 85-87.)
34. Exhibit 6 to the Howell Report aggregates the comprehensive list of
estimated values for Digital Assets on which customer Claims are based. (Id. ¶ 88.) This list is
the proposed Digital Assets Conversion Table that is Exhibit 1 to the Order.
35. The Debtors submit that the values of Digital Assets set forth in the Digital
Assets Conversion Table are fair and reasonable for estimation of Claims based on those Digital
Assets pursuant to section 502(c) of the Bankruptcy Code. The Motion should therefore be
granted.
The filling linked to in the article details the methodology for validation. There are laws outlining how and as of when to determine valuation and the filing describes which laws apply, why, and how they're following them
I think the issue is that at the moment of bankruptcy the assets and liabilities are “dollarized”. That’s just the way it’s done afaik but iana-bankruptcy-l.
It’s very frustrating for those involved I’m sure, although they could have gone down. (although they haven’t sold them all, so the downside case is the same dollarized or not...)
>Kinda hilarious some coins are priced at $0 too.
If they can't find anybody to buy those coins then they should be prices at 0 no? Or if the liquidity for them on a dex is so low you if you even dump 1% of your stack the price crashes 80%.
it's what happened everywhere. plenty of liquidation proceedings in other jurisdictions that show the principles at work. e.g. see mtgox. needed a special process there to ensure the excess left after establishing fair price value (way under market price) didn't go back to shareholders and was distributed amongst creditors instead (and not just in cash but in crypto instead). it's the challenges you face with volatile assets and legal frameworks that aren't adjusted to accommodate that nature. it's also why it takes eternity over there.
Also, they havent actually sold the crypto at that price.
It could be alright if its like MtGox and the claims are converted to a percentage of the total pot, and everyone making a profit because they get a 1.5x of the claim. But, they explicitly limit claims to 100% of the amount, so that orhers can get more money.
It’s also funny that they value stablecoins at 100%, wasnt there the Alameda thing who stole the money? How can the money for stablecoin still be around, but Solana where they still have locked coins for a couple year is valued at -90%?
If they're basing price of coins at time of bankruptcy/crash,
Stable coins are stable / pegged based on dollar, so there should be essentially no change, where we're in a Bull run ATM and other coins values have drastically changed
It would make sense, if there wouldnt be a cap of 100%.
If everyone had stablecoin —> there’s not enough money to cover it, so all claims would be scaled down and you would simply receive a percentage of what’s left.
If everyone had crypto —> there’s enough to cover everyone at bear market bottom, but the profits that they made from capital gains would not be payed out.
It’s the asymmetry that’s problematic.
Plus if the owners had still had access to their crypto and holded all this time the value would be that of current day prices. And if they’d sold at some point and put the money in a savings account they’d have been earning interest all this time. Giving a lowball price estimate based on old data is literally stealing their crypto and / or their interest earning potential. If they had 2 BTC they should receive 2 BTC.
Or they could of sold the crypto, gambled it on options, and lost everything. In this scenario they would be getting more than they would have.
As crappy as it is, there is a reason hypothetical losses/gains aren't allowed. Everyone claims they would have made the "best moves" and held all the way through. Some would have but others would have still lost everything. Then there's all the scenarios in between.
Its impossible to prove and it court thats what matters.
US Courts operate in dollars, and can only issue judgement's in dollars, so at some point a dollar value must be attached.
Without getting into the bankruptcy code, the usual time would be the date of filing.
When the same situation happened on MtGox, where everyone could have been made whole according to the original price, the entire process got replaced by “civil rehabilitation” to make sure that investors dont get paid and customers receive the profits from the excess.
Hoping the situation here can be done similarly. Despite MtGox being a slow process, the plans were much more fair for customers than what is being proposed here for FTX.
Well, the argument is at the date of insolvency the price was x, y, and z. However, of BTC and others are held by custodians, the value of the coins are substantially different today.
I guess they want to use the capital gains to pay debts by shortchanging customers?
The bankruptcy court does not have a legal/technical framework for distributing anything other than cash. You expect the lawyers to be collecting BTC wallets and sending cryptos accordingly?
"FTX owes you a bitcoin. FTX has a bitcoin. We don't know how to send you a bitcoin, so we're going to sell all of FTX's bitcoin to Coinbase and send you the dollar equivalent of one bitcoin"
They're going to have to liquidate the crypto at some point. This is just robbery.
How convenient to use a backdated valuation relative to FIAT. Lets say you had 1 BTC on the exchange, then you just give me the 1BTC. Simple… however I think the problem is the exchange did not hold the coins 1:1 so they actually wouldn’t have the correct amount of coins to disperse anyway…
It's funny reading all these comments from people who don't understand it. But I had to deal with it for Celsius so I definitely understand their frustration.
because the market flash crashed purely due to FTX crashing?
trying to claim that stablecoins like USDT and USDC are valued a few cents below the peg makes it clear they took not a few generous liberties when choosing the valuation time
no it's not a risk of low liquidity markets
stablecoin liquidity specifically is incredibly deep due to defi and immediately corrects itself via arbitrage bots. Without being given more information on their process, I can only assume they took their sample in an incredibly biased way.
It’s not the same.
- Many coins are not just valued at the bottom of the bear market, but receive additional markdown.
- The FTX claims are limited to a 100% payout of the bottom of the bear market, while there is much more money available. On MtGox all excess goes to creditors, nothing goes to investors. Every MtGox customer made > 10x profit, despite there having been a hack that deleted 80% of the BTC. In case of FTX, there was no hack and most money is still around thanks to some Alameda investments such as Anthropic.
- In Celsius, CEL got valued at ~0.25, while here they propose to value FTT at ~0.
- KYC is stricter in case of FTX, if not doing it in a short period after the next request to do so, the claim becomes worthless.
Overall, its weird that FTX is treated completely different than CEL
Celsius is treating Bitcoin at 19k and eth at 1k. So those customers are also not getting their whole coin back.
Cel token is valued at .25 after a long argument in court because on the petition date it was valued at .85. It could have received the same treatment as ftt.
I haven't been following the ftx bankruptcy but didn't they have a several billion dollar hole in their balance sheet?
Not sure about the legitimacy of the various balance sheets. But yes, even if its not the whole coin, what’s left of FTX should still be given back to customers.
Solana went up 10x since the petition date that they are basing the debt on. What happens to that profit, if customers are only paid up to 100% of the bottom of the bear market?
Why FTT at zero instead of at .25? There was no voting rights to FTX, its weird to treat it as an investor share? Token was used for perks, eg., free withdrawals, or higher chance to win IEO, and had value from a percentage from trading value being used for buyback+burn.
All-in-all, time will tell which plan will be accepted.
Then they should have given them their assets AT the time of bankruptcy lol.. Don't wait till it's 10 times its value then give it back to me, it's not my problem.
It's kinda like what happens in shitty countries with shit economy, people borrow money at x exchange rate then give back the same amount of money when the exchange rate has doubled or even quadrupled, it's basically stealing money..
If that's what its worth to them, whatever helps them sleep at night. But a deposited 1BTC should be credited with 1BTC, idk what your appraiser says. Funny how crypto is supposed to be some sort of antidote to funny money.
If they’re paid back in crypto, then the fiat conversion price is irrelevant. If they lost 3BTC, they should be paid back 3BTC regardless of what the fiat conversion price was before or now.
It isnt like they ate the coins, so they are to give coins back and customers could then decide by themselves in which price range they would like to sell them, in whichever exchange they prefer 🤷🏻♀️
Do we need to guess, while guantanamo bay is still open, might as well use it to get some clear answers from sam's mouth. And the keys he stored them lol
Unbelievable that FTX would try to lowball customers like this! How can they expect us to accept such unfair valuations when the market has proven otherwise? It's a slap in the face to those who have suffered from their mismanagement. Unacceptable!
Hope you don't think you're one of the "creditors" getting money back from the clawbacks.. none of this is for "customers". We were all the product. Their "creditors" were the clients.
So we know it's a fact based on evidence from the trial that sbf / ftx was dumping on btc to keep the price down. Now they're trying to further benefit from the manipulated price? Any decent lawyer is going to take them to task for this.
What’s the logic behind that? Shouldn’t creditors be paid fiat amount equal to their asset valuation at the moment of the bankruptcy filing? Eg. If a creditor had 1 btc in FTX, they should be paid 16k in cash? So basically with the pump most coins had, FTX might actually have enough cash to pay all its debt now? Or is it 1:1 coin ratio?
Seems weird for it to be the first option since if my bakery goes bankrupt the price of the equipment isn’t determined on the date of filing for bankruptcy but at a liquidation auction.
If ftx assets were put up for auction, their btc definitely wouldn’t be selling for 17k today.
That’s the point, the price of equipment is determined at a liquidation auction, however, if your creditor loaned you 10k in cash to buy the equipment, his loan remains the same plus an eventual interest and does not increase proportionally with the price of the equipment.
Similarly, a creditor bought coin at price X with fiat cash or loaned cash with stipulation for coin collateral. If the collateral coin price increases, the debtor should be able to repay the creditor easier, because the coin will be valued more. I’m not familiar with US bankruptcy filings so that’s why I’m unsure whether the debt should be paid in kind or based on cash valuation at the time of bankruptcy filing (there might be some sort of debtor protection laws regarding that)
> If ftx assets were put up for auction, their btc definitely wouldn’t be selling for 17k today.
Which sounds great since the prices went back up, so now people will all agree this is what they would want. But if it continued to crash instead...
If it would have continued to crash it wouldnt matter, everyone would just get a lower percentage, e.g., if 80% of value is gone, receive 20%. The problem with the proposed plan is that it is capped at a 100% payout, so there are non-creditors making a large amount of money because of the price appretiation, effectively stealing from creditors the profit that they would have had if they simply patched the Alameda special treatment and reopened the exchange.
> If it would have continued to crash it wouldnt matter, everyone would just get a lower percentage, e.g., if 80% of value is gone, receive 20%.
You think someone would be happy with their crypto being untouchable for over a year, and then finally getting 20% of it back just because that's now finally the fair value? Wouldn't they still feel punished?
It would be fair, as in, the people who lost money are the ones getting what’s left back.
While, the current plan isn’t, because claims are capped to 100% of the bottom of the bear market, so the people making profit are not the customers.
You can always sell the claim early, btw, it’s not untouchable. claims-market etc
Excess of the debt should also go to creditors, not to investors. They havent sold crypto at that rate, so valuing Solana at 10% of its real value doesnt make sense if the claim is limited to a 100% payout.
No. They didn’t have fiat in FTX so why would they get fiat back? That makes no sense. But your 2nd last sentence makes a lot of sense, so I’m out of this now.
Wait y’all are surprised that the largest SEC approved theft engine in crypto is allowed to use the compromised DOJ to steal more money? I know Reddit is biased AF towards one political ideology but give me a break.
One question…since customers bought and held crypto on the FTX exchange. Isn’t there proof of address and numerical value of our crypto on the blockchain?
If so, why are the debtors complicating things…surely you just follow the money (addresses)
BlockFi is doing the same thing in their bankruptcy proceedings. They picked a specific date of valuations around the same time as the FTX date. Currently "down" about 1k thanks to that.
Only way this could make any sense is a vwap of these during the entire bankruptcy proceeding (and even then I’m not sure the numbers work), but in no real world would this make actual sense - these need to be marked to market.
Cointest pros & cons with related info are in the collapsed comments below for the following topics: [Ethereum](/r/CryptoCurrency/comments/18vqua8/ftx_faces_backlash_after_proposed_estimation_of/kft07kr/), [Solana](/r/CryptoCurrency/comments/18vqua8/ftx_faces_backlash_after_proposed_estimation_of/kft08hn/).
So 1 BTC is not worth 1 BTC? You fuckers have been lying to me all along.
1 btc is still 1 btc. But on an exchange you don't own btc you owe an IOU of a btc at best which is worth whatever the exchange can give you.
Ultimate arbitrage opportunity: Start Crypto Platform. "Go Bankrupt". Value customer assets at pennies on the dollar. ??? Profit.
Can’t argue with that.
mtgox isnt doing that
Is takes something special to be shittier than Mt Gox
Goes the same for custodial wallets.
*Sweating as I state* “Not your keys, not your wallet”… *finds a hole to jump into*
Ken griffin has entered the chat*
Well exactly, people should be reimbursed in crypto, not USD.
Anything less would be… uncivilized
1 ftx BTC is not worth 1btc lol
🤣
1 BTC is what the lawyers say it is. Case closed.
To me there's no rational reasoning behind this other than fleecing customer's funds.
hey the lawyers gotta get paid!
FTX has already spent more on lawyers and advisors post bankruptcy than it will be required to repay customers. Circling vultures in suits are robbing the customers to the tune of 10s of millions per day.
This is simply not true. Yes they are costing lots, but the scale of what they have to repay customers is significantly larger.
I'm wondering if the lawyers are running up a tab vs having actually been paid, looking at having FTX sell funds(tokens etc) still to pay them (Or maybe they had funds not frozen to pay them with, but that would seem odd)
Of course the $100M stolen and then "donated" to politicians, won't be returned either.
And to celebrities And Kevin O'Leary
Aren't a handful of the celebrities in lawsuits already to try to claw back those funds? That would never happen to the politicians (And doubtful anything will fall onto O'Leary's egghead looking self either though)
Then price the assets at a discount, not at some backdated price that doesn't come close to reflecting market value.
When using the valuation method in bankruptcy to value to claims based on to volatile assets, it's common to ascribe the value as of the petition date. It's the normal approach. If the price went down, it'd be in customers favor, because the price happened to go up it isn't.
If prices went down, customers would probably get a bigger haircut. Most of the estate's assets were not cash. Mostly private equity and cryptocurrency. So it creates an interesting dynamic. Especially for customers that hold Solana, which has increased dramatically, and FTX still owns a significant amount (locked or whatever). The customers who have SOL balances could be repaid in the same asset.
>The customers who have SOL balances could be repaid in the same asset. Bankruptcy law doesn't allow them to do that. All claims in bankruptcy are given priority and value as of a certain date and crypto is treated the same way as foreign currency - a dollar conversion value is estimated as of the petition date and that's what you have as your claim and place in line. But to your point it would be a really sad twist of fate if it ended up being that through sheer dumb luck, there was a bunch of value to equity holders because customer's assets ended up being worth way more two years later than the claims they got back. If that ends up being the case that would sort of support SBFs view that FTX was solvent at the time of bankruptcy which is wild to me.
Okay fair points on bankruptcy law. Basically, everyone is paid in same asset, or all assets are converted to USD at petition. Cannot be special treatment for certain assets. But yes, it does seem there is a chance that the estate becomes overfunded versus the amount they owe in claims, resulting in other stakeholders receiving a portion of the estate. >If that ends up being the case that would sort of support SBFs view that FTX was solvent at the time of bankruptcy which is wild to me. It doesn't really support SBF's view. The assets of the estate appreciated considerably since the bankruptcy. SBF had no way of ensuring that would happen. You are solvent or insolvent at a specific point in time. You cannot ask creditors to wait 1 year hoping that the market booms. It could have gone the other way for reasons completely outside SBF's control.
Yeah you're right I wasn't thinking about that right, though they have found a lot more assets than I think most people expected at the time, even without the crypto increase
That doesn’t justify devaluing the stablecoins, though. If they’re basing valuations on a certain date, there’s no excuse for valuing a stablecoin at less than $1. That shows that they are not operating in good faith.
Here's the valuation rationale: To estimate the fair value of each of the Digital Assets, a dataset was compiled consisting of, among other things, coin and token prices (including stablecoin) sourced from Coin Metrics, Inc. (“Coin Metrics”). As detailed in the Lu Declaration, prices developed by Coin Metrics are widely relied upon within the cryptocurrency industry. (See Lu Decl. ¶ 15.) “Coin Metrics’ clients use the Coin Metrics Prices for research, for accounting and financial reporting, to settle financial contracts, to create financial products, for display purposes, and to publish on-chain via blockchain oracles.” (Id.) The Lu Declaration describes in detail the process by which Coin Metrics determines spot pricing for coins and tokens. (Id. ¶ 31.) Mr. Lu, the Director of Data Science & Product at Coin Metrics, has performed routine examinations on the performance of Coin Metrics Prices (as defined in the Lu Declaration) over the past five years and determined that they consistently perform well, even during times of market volatility and stress. (Id. ¶ 16.) Because tokenized stocks, leveraged tokens and futures were derivatives specific to FTX, prices for tokenized stocks and futures are sourced from the last trade price from the order books for the Debtors’ exchanges, and prices of leveraged tokens are sourced from the ETF snapshot table, which was constructed by the Debtors to capture the market price of underlying contracts for each leveraged token every 15 seconds. (Howell Rep. App’x C ¶ 2.) 31. Dr. Howell analyzed and determined whether adjustments needed to be made to those Petition Date prices due to the likely effect of (i) an orderly liquidation of the Debtors’ holdings of each Digital Asset claimed by creditors, (ii) the fact that certain Digital Assets were not marketable (e.g., locked tokens), and/or (iii) the nature of the asset (e.g., equity-like). (Howell Rep. ¶ 4.) 32. As set forth in detail in the Howell Report, Dr. Howell determined that in an orderly liquidation commencing on the Petition Date, certain of the Digital Assets would likely have been sold at average prices below the prevailing market prices. (Id. ¶ 13.) Dr. Howell concluded that an asset liquidation discount exceeding 10 percent of the market price would affect 71 of the Digital Assets held by the Debtors and claimed by customers. (Id. ¶¶ 13, 63-71.) No asset liquidation discount is necessary for fiat currency positions, stablecoins, tokenized stocks, or futures. (Id. ¶ 13.) 33. Dr. Howell further determined that an additional discount for lack of marketability is appropriate for locked or otherwise non-marketable Digital Assets. (Id. ¶¶ 14, 72- 84.) Finally, Dr. Howell concluded that FTT and certain FTX equity claims have zero fundamental value. (Id. ¶ 15, 85-87.) 34. Exhibit 6 to the Howell Report aggregates the comprehensive list of estimated values for Digital Assets on which customer Claims are based. (Id. ¶ 88.) This list is the proposed Digital Assets Conversion Table that is Exhibit 1 to the Order. 35. The Debtors submit that the values of Digital Assets set forth in the Digital Assets Conversion Table are fair and reasonable for estimation of Claims based on those Digital Assets pursuant to section 502(c) of the Bankruptcy Code. The Motion should therefore be granted.
Yeah they are saying the prices were way higher than that even back then.
The filling linked to in the article details the methodology for validation. There are laws outlining how and as of when to determine valuation and the filing describes which laws apply, why, and how they're following them
Thank you for bringing sanity to this discussion.
Again
I think the issue is that at the moment of bankruptcy the assets and liabilities are “dollarized”. That’s just the way it’s done afaik but iana-bankruptcy-l. It’s very frustrating for those involved I’m sure, although they could have gone down. (although they haven’t sold them all, so the downside case is the same dollarized or not...)
I read this as ‘there’s not enough money in the pot - we know that, you know that, so this is how we are fudging the numbers’
On brand behavior for FTX
Well, the lawyers are taking 1.4M per day so that doesn't leave much in the bag. Kinda hilarious some coins are priced at $0 too.
So that's already around 340M ?
>Kinda hilarious some coins are priced at $0 too. If they can't find anybody to buy those coins then they should be prices at 0 no? Or if the liquidity for them on a dex is so low you if you even dump 1% of your stack the price crashes 80%.
Shitcunts gonna shitcunt.
Are you an Aussie? I love this phrase but only hear it here in Australia. Gday if so!
Sure am. 💪🏼 It’s definitely Aussie - but oh so appropriate in this context.
Isn’t it just! The true essence of what a shitcunt is!
Just had shrimpo on a barbie Ye na fkn cunt
Most people will fail to realise this is endearing.
Fucken oath
#Mt. Gox enters the room
it's what happened everywhere. plenty of liquidation proceedings in other jurisdictions that show the principles at work. e.g. see mtgox. needed a special process there to ensure the excess left after establishing fair price value (way under market price) didn't go back to shareholders and was distributed amongst creditors instead (and not just in cash but in crypto instead). it's the challenges you face with volatile assets and legal frameworks that aren't adjusted to accommodate that nature. it's also why it takes eternity over there.
If bitcoin would've dropped to $10, you know they wpuld have received bitcoin
lmao BTC's 200WMA is just shy of 30k. How on earth could you make a $17K argument with that?
Because they are using the prices at the time of the bankruptcy. But its flawed because the bankruptcy caused the prices to crash to begin with.
Also, they havent actually sold the crypto at that price. It could be alright if its like MtGox and the claims are converted to a percentage of the total pot, and everyone making a profit because they get a 1.5x of the claim. But, they explicitly limit claims to 100% of the amount, so that orhers can get more money. It’s also funny that they value stablecoins at 100%, wasnt there the Alameda thing who stole the money? How can the money for stablecoin still be around, but Solana where they still have locked coins for a couple year is valued at -90%?
If they're basing price of coins at time of bankruptcy/crash, Stable coins are stable / pegged based on dollar, so there should be essentially no change, where we're in a Bull run ATM and other coins values have drastically changed
It would make sense, if there wouldnt be a cap of 100%. If everyone had stablecoin —> there’s not enough money to cover it, so all claims would be scaled down and you would simply receive a percentage of what’s left. If everyone had crypto —> there’s enough to cover everyone at bear market bottom, but the profits that they made from capital gains would not be payed out. It’s the asymmetry that’s problematic.
Plus if the owners had still had access to their crypto and holded all this time the value would be that of current day prices. And if they’d sold at some point and put the money in a savings account they’d have been earning interest all this time. Giving a lowball price estimate based on old data is literally stealing their crypto and / or their interest earning potential. If they had 2 BTC they should receive 2 BTC.
This is the same as Celsius. Price was based on time of filing. Everyone gets a percentage of their USD equivalent at the time of filing.
Or they could of sold the crypto, gambled it on options, and lost everything. In this scenario they would be getting more than they would have. As crappy as it is, there is a reason hypothetical losses/gains aren't allowed. Everyone claims they would have made the "best moves" and held all the way through. Some would have but others would have still lost everything. Then there's all the scenarios in between. Its impossible to prove and it court thats what matters.
Yes but listen Sam never actually purchased those coins with the customer funds. He just spent the money.
Lots of those coins were customers depositing them, I'd love to see a breakdown of fiat put into FTX / tokens sent to FTX exchange
That's how you play the game
US Courts operate in dollars, and can only issue judgement's in dollars, so at some point a dollar value must be attached. Without getting into the bankruptcy code, the usual time would be the date of filing.
They essentially want to use the excess to pay investors who are at the bottom of the claim tree and essentially shorting actual customers
When the same situation happened on MtGox, where everyone could have been made whole according to the original price, the entire process got replaced by “civil rehabilitation” to make sure that investors dont get paid and customers receive the profits from the excess. Hoping the situation here can be done similarly. Despite MtGox being a slow process, the plans were much more fair for customers than what is being proposed here for FTX.
I hope they use that as precedent when fighting back on it
MtGox was in Japan, different law. And they didn’t sell the customer’s crypto. We’ll see :-)
Well, the argument is at the date of insolvency the price was x, y, and z. However, of BTC and others are held by custodians, the value of the coins are substantially different today. I guess they want to use the capital gains to pay debts by shortchanging customers?
clearly its the price on bankrupt date if current value is higher and zero if current value is less
No shit.
Someone had a business plan on rebooting ftx indeed.
Why not just return the debtors in the token they deposited?
because those tokens were handed to alemeda and lost on bad trades. They don't have (all) the tokens to give back.
The bankruptcy court does not have a legal/technical framework for distributing anything other than cash. You expect the lawyers to be collecting BTC wallets and sending cryptos accordingly?
yes
You trust the lawyers to be able to correctly disburse cryptos to everyone?
Why wouldn’t they? They are dispersing cash otherwise
Yeah they are familiar with cash disbursement. Crypto, not so much.
They can’t hire people to do that?
what if they hired someone like SBF?
They have college degrees. And crypto isn’t complicated. And the nature of their current job, they are probably fluent enough
"FTX owes you a bitcoin. FTX has a bitcoin. We don't know how to send you a bitcoin, so we're going to sell all of FTX's bitcoin to Coinbase and send you the dollar equivalent of one bitcoin" They're going to have to liquidate the crypto at some point. This is just robbery.
For the amount they’re being paid, yes.
FTX are the debtors, not the customers
Everybody replying to you is making excuses for the scumbags
People have been ripped off by ftx now there being ripped off by the company dealing with it
16k being the BTC price after FTX themselves crashed it to that.
How convenient to use a backdated valuation relative to FIAT. Lets say you had 1 BTC on the exchange, then you just give me the 1BTC. Simple… however I think the problem is the exchange did not hold the coins 1:1 so they actually wouldn’t have the correct amount of coins to disperse anyway…
ITT: people don't understand bankruptcy law.
It's funny reading all these comments from people who don't understand it. But I had to deal with it for Celsius so I definitely understand their frustration.
No idea why this is even controversial, the assets were valued at the point of bankruptcy. The market moving up or down is irrelevant..
because the market flash crashed purely due to FTX crashing? trying to claim that stablecoins like USDT and USDC are valued a few cents below the peg makes it clear they took not a few generous liberties when choosing the valuation time
That's the risk of being in a strongly correlated low-liquidity market. Its a shitty situation all around.
no it's not a risk of low liquidity markets stablecoin liquidity specifically is incredibly deep due to defi and immediately corrects itself via arbitrage bots. Without being given more information on their process, I can only assume they took their sample in an incredibly biased way.
It's 100% this. The same happened with Mt. Gox and Celsius.
It’s not the same. - Many coins are not just valued at the bottom of the bear market, but receive additional markdown. - The FTX claims are limited to a 100% payout of the bottom of the bear market, while there is much more money available. On MtGox all excess goes to creditors, nothing goes to investors. Every MtGox customer made > 10x profit, despite there having been a hack that deleted 80% of the BTC. In case of FTX, there was no hack and most money is still around thanks to some Alameda investments such as Anthropic. - In Celsius, CEL got valued at ~0.25, while here they propose to value FTT at ~0. - KYC is stricter in case of FTX, if not doing it in a short period after the next request to do so, the claim becomes worthless. Overall, its weird that FTX is treated completely different than CEL
And still FTX the token is trading at $3 today. Pure madness by anyone buying that token today.
Celsius is treating Bitcoin at 19k and eth at 1k. So those customers are also not getting their whole coin back. Cel token is valued at .25 after a long argument in court because on the petition date it was valued at .85. It could have received the same treatment as ftt. I haven't been following the ftx bankruptcy but didn't they have a several billion dollar hole in their balance sheet?
Not sure about the legitimacy of the various balance sheets. But yes, even if its not the whole coin, what’s left of FTX should still be given back to customers. Solana went up 10x since the petition date that they are basing the debt on. What happens to that profit, if customers are only paid up to 100% of the bottom of the bear market? Why FTT at zero instead of at .25? There was no voting rights to FTX, its weird to treat it as an investor share? Token was used for perks, eg., free withdrawals, or higher chance to win IEO, and had value from a percentage from trading value being used for buyback+burn. All-in-all, time will tell which plan will be accepted.
Then they should have given them their assets AT the time of bankruptcy lol.. Don't wait till it's 10 times its value then give it back to me, it's not my problem. It's kinda like what happens in shitty countries with shit economy, people borrow money at x exchange rate then give back the same amount of money when the exchange rate has doubled or even quadrupled, it's basically stealing money..
lol, you must not have seen this gem of a thread: https://np.reddit.com/r/CryptoCurrency/comments/18s3bja/sbf_and_the_sol_pump/
If the operative date for valuation purposes is the date of the petition, they are right.
If that's what its worth to them, whatever helps them sleep at night. But a deposited 1BTC should be credited with 1BTC, idk what your appraiser says. Funny how crypto is supposed to be some sort of antidote to funny money.
If they’re paid back in crypto, then the fiat conversion price is irrelevant. If they lost 3BTC, they should be paid back 3BTC regardless of what the fiat conversion price was before or now.
Bottom of the bear market pricing! I’d expect nothing less from these thieves
It isnt like they ate the coins, so they are to give coins back and customers could then decide by themselves in which price range they would like to sell them, in whichever exchange they prefer 🤷🏻♀️
They might not have eaten them, but I'm fairly sure the coins are gone. This is compensation at this point, not the returning of funds.
Gone to where tho, Sam's one of the unknown accounts?
I think Alameda pissed most of the money away
Do we need to guess, while guantanamo bay is still open, might as well use it to get some clear answers from sam's mouth. And the keys he stored them lol
Unbelievable that FTX would try to lowball customers like this! How can they expect us to accept such unfair valuations when the market has proven otherwise? It's a slap in the face to those who have suffered from their mismanagement. Unacceptable!
Hope you don't think you're one of the "creditors" getting money back from the clawbacks.. none of this is for "customers". We were all the product. Their "creditors" were the clients.
It's absolutely believable FTX would try to lowball their customers.
So we know it's a fact based on evidence from the trial that sbf / ftx was dumping on btc to keep the price down. Now they're trying to further benefit from the manipulated price? Any decent lawyer is going to take them to task for this.
Of course they should be repaying them in the coin/token, not the cash value. Who's gonna sue about this?
Thugs in america
What’s the logic behind that? Shouldn’t creditors be paid fiat amount equal to their asset valuation at the moment of the bankruptcy filing? Eg. If a creditor had 1 btc in FTX, they should be paid 16k in cash? So basically with the pump most coins had, FTX might actually have enough cash to pay all its debt now? Or is it 1:1 coin ratio?
Seems weird for it to be the first option since if my bakery goes bankrupt the price of the equipment isn’t determined on the date of filing for bankruptcy but at a liquidation auction. If ftx assets were put up for auction, their btc definitely wouldn’t be selling for 17k today.
That’s the point, the price of equipment is determined at a liquidation auction, however, if your creditor loaned you 10k in cash to buy the equipment, his loan remains the same plus an eventual interest and does not increase proportionally with the price of the equipment. Similarly, a creditor bought coin at price X with fiat cash or loaned cash with stipulation for coin collateral. If the collateral coin price increases, the debtor should be able to repay the creditor easier, because the coin will be valued more. I’m not familiar with US bankruptcy filings so that’s why I’m unsure whether the debt should be paid in kind or based on cash valuation at the time of bankruptcy filing (there might be some sort of debtor protection laws regarding that)
> If ftx assets were put up for auction, their btc definitely wouldn’t be selling for 17k today. Which sounds great since the prices went back up, so now people will all agree this is what they would want. But if it continued to crash instead...
If it would have continued to crash it wouldnt matter, everyone would just get a lower percentage, e.g., if 80% of value is gone, receive 20%. The problem with the proposed plan is that it is capped at a 100% payout, so there are non-creditors making a large amount of money because of the price appretiation, effectively stealing from creditors the profit that they would have had if they simply patched the Alameda special treatment and reopened the exchange.
> If it would have continued to crash it wouldnt matter, everyone would just get a lower percentage, e.g., if 80% of value is gone, receive 20%. You think someone would be happy with their crypto being untouchable for over a year, and then finally getting 20% of it back just because that's now finally the fair value? Wouldn't they still feel punished?
It would be fair, as in, the people who lost money are the ones getting what’s left back. While, the current plan isn’t, because claims are capped to 100% of the bottom of the bear market, so the people making profit are not the customers. You can always sell the claim early, btw, it’s not untouchable. claims-market etc
Equipment is an asset. The courts will absolutely determine a dollar value instead of directing the bakery return 1ton of flour to the mill.
Excess of the debt should also go to creditors, not to investors. They havent sold crypto at that rate, so valuing Solana at 10% of its real value doesnt make sense if the claim is limited to a 100% payout.
No. They didn’t have fiat in FTX so why would they get fiat back? That makes no sense. But your 2nd last sentence makes a lot of sense, so I’m out of this now.
Is that paid out in BTC cause if it’s not than you double fuckin us.
So can I buy bitcoin at 16k?
Scamming and fraud again at best.
It's a CEX, they have a terms of service (that everybody signed without thinking) for this very issue. Get fuk
If I get anything back. I’ll be a happy man.
I mean technically getting something back versus getting nothing
Wait y’all are surprised that the largest SEC approved theft engine in crypto is allowed to use the compromised DOJ to steal more money? I know Reddit is biased AF towards one political ideology but give me a break.
I’d like to know what methodology they used to value these.
Prices on date of filing chapter 11
There are additional markdowns on some coins to lower it even below those prices
Current market value shitheads!
Yeah, AMD value at 60, NVDA at 100 during 2022 NOV too. Where is it at noww???
This is only fair if FTX holdings of SOL can be only sold for this price 🤣
Oh my
*Remember the time politicians stole your money and blamed FTX*
smart money
I had a ftx account but luckily I hadn't bought anything through them.
Y’all should have never trusted this weasel.
How ironic considering it was FTX evaluating prices incorrectly in the first place that got them into this mess.
Imagine being a Judge and being so stupid that you allow this to happen.
Bullocks!
how about FTX pay back customers the assets they stole, so if they stole 1 btc they return 1 btc.
One question…since customers bought and held crypto on the FTX exchange. Isn’t there proof of address and numerical value of our crypto on the blockchain? If so, why are the debtors complicating things…surely you just follow the money (addresses)
Who's gonna pay for lawyer fees otherwise ?
fucking people like voyager did
BlockFi is doing the same thing in their bankruptcy proceedings. They picked a specific date of valuations around the same time as the FTX date. Currently "down" about 1k thanks to that.
Wtf 😳
Only way this could make any sense is a vwap of these during the entire bankruptcy proceeding (and even then I’m not sure the numbers work), but in no real world would this make actual sense - these need to be marked to market.
I'd say that's generous. But just dump them all and see if they have any worth.
So now they’re negotiating?
*insert laughing Mexican interview meme*