Sunil Kavuri, a representative of the largest FTX creditor group, is urging others to reject the bankrupt crypto exchange’s reorganization plan.
“Vote NO to the plan,” Kavuri posted on X early Wednesday.
Kavuri’s stance is that the estate should pay out cryptocurrencies rather than the dollar value, a sentiment he has maintained since the exchange filed for bankruptcy. He argues that the debtors owe FTX customers significantly more than the petition prices, claiming they have “destroyed an estimated over $10 billion” in value for FTX creditors.
Criticism has been directed at FTX’s debtors for their handling of the estate’s assets. For example, they sold a stake in Mysten Labs and token warrants for the Sui token for $96 million shortly before the token’s launch. Those tokens alone would now be worth $935 million.
Kavuri also referenced the ongoing lawsuit against the estate’s law firm Sullivan and Cromwell over its ties to the exchange prior to its collapse. He claimed that the plan includes an exculpation clause “so they and no one involved [can be] sued for misconduct.”
FTX’s reorganization plan, announced on Tuesday, aims to give 98% of its creditors at least 118% of allowed claims, with other creditors receiving full repayment and additional compensation for the time value of their investments.
“We are pleased to be in a position to propose a Chapter 11 plan that contemplates the return of 100% of bankruptcy claim amounts plus interest for non-governmental creditors,” FTX CEO John J. Ray III said in the release.
FTX intends for the repayments to occur within 60 days after the plan’s effective date, estimating the total value of cash available for distribution to be between $14.5 billion and $16.3 billion. However, the plan is subject to court approval.
The bankrupt FTX exchange faced challenges due to alleged illegitimate operations by its executives, leading to a liquidity crisis and its collapse in November 2022. Former FTX CEO Sam Bankman-Fried was found guilty in November 2023 on all seven criminal counts of defrauding FTX customers and investors and was sentenced to nearly 25 years in prison in March.
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