The Mt. Gox Rehabilitation Trustee has announced that repayments in bitcoin and bitcoin cash have begun for some creditors. Further repayments will occur once several conditions are met. Mt. Gox has moved significant bitcoin amounts ahead of its planned billion repayment. Bitcoin’s price dropped amid these developments and other market activities. Mt. Gox Begins […]
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Mt Gox to Start Distributing $9 Billion in Bitcoin to Creditors in July After Decade-Long Wait
On Monday, June 24, 2024, the Mt Gox bankruptcy trustee declared that reimbursements are slated to commence at the start of July. The trustee explained that disbursements will be made in bitcoin and bitcoin cash and sent to designated exchanges. After Ten Years, Mt Gox Trustee Announces July Start for Repayments Approximately billion worth […]
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FTT Surges 50% On FTX Creditors’ Claims Settlement And Billions In Compensation: How High Can It Rise?
In a significant development, defunct cryptocurrency exchange FTX has unveiled a reorganization plan to reimburse almost all of its customers.
The announcement has sparked a substantial surge in the exchange’s native token, FTT, which recorded an uptrend of 52% over the past seven days, reaching a monthly high of .29 during Wednesday’s early trading session.
FTX Unveils Debt Repayment Strategy
FTX estimates its outstanding debts to creditors to be approximately .2 billion, as revealed in the reorganization plan published late Tuesday. The company has disclosed that it possesses between .5 billion and .3 billion, which it intends to distribute among the creditors.
Under the proposed plan, customers with ,000 or less claims will receive approximately 118% of the allowed claim amount. This compensation is slated to be disbursed to around 98% of the creditors, relieving FTX customers who have experienced locked funds since the exchange filed for bankruptcy protection in November 2022.
FTX stated in a press release on Wednesday that the company could not utilize the appreciation of the missing tokens during the Chapter 11 cases. Instead, FTX had to identify other recoverable sources of value to repay creditors.
Following the departure of founder Sam Bankman-Fried, FTX appointed John Ray III as CEO. Ray, speaking on the matter in November 2022, expressed his astonishment at the “complete failure of corporate controls and such a complete absence of trustworthy financial information” witnessed at FTX. Ray further stated in the press release on Wednesday:
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’s founder, Sam Bankman-Fried, faced legal consequences, being convicted on seven criminal counts, including charges related to embezzling billions of dollars from FTX’s customers. Bankman-Fried was subsequently sentenced to 25 years in prison.
FTT Bulls Eyeing .55 For Potential Breakout Continuation
As of the latest update, the price of FTT has corrected to .050 after reaching its monthly high. This breakout occurred after consolidation between the .17 and .48 levels.
At the current price level, FTT faces a significant resistance at .169, which has led to the ongoing correction. If FTT sustains its bullish momentum, the next resistance level to watch is .55 in the token’s daily chart.
A successful breakthrough of this level could potentially lead to a retest of the mark, which has not been revisited since January.
On the other hand, if the price experiences a further correction, FTT bulls should closely monitor the .95 and .765 levels, as they serve as crucial support levels. It is essential to prevent a loss of the gains achieved over the past month, which amounts to an 18% increase during this period.
Featured image from Shutterstock, chart from TradingView.com
Most FTX Creditors to Receive Over 100% Repayment, Court Document Shows
FTX is poised to repay nearly all its account holders fully, according to a reorganization plan presented in court. The bankrupt cryptocurrency exchange has raised about billion mainly by selling investments from itself and its affiliate, Alameda Research. This fund will ensure payments of 118 cents on the dollar for 98% of creditors with […]
Bitcoin News
FTX CEO Disputes Sam Bankman-Fried’s Claims of Solvency and No Harm to Creditors
John J. Ray III, the chief executive officer of FTX Trading Ltd., has issued a strong rebuttal against former CEO Sam Bankman-Fried’s assertions regarding the company’s financial state and the impact on its creditors. FTX Chief Restructuring Officer and CEO Debunks Bankman-Fried’s FTX Solvency Claims John J. Ray III outlined the extensive efforts made to […]
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Crypto Titan Digital Currency Group Opposes Genesis’ Restructuring Plan for Favoring Select Creditors
In a legal document filed on Feb. 6, 2024, the crypto juggernaut, Digital Currency Group (DCG), voiced opposition to Genesis’ revised bankruptcy strategy for multiple concerns. DCG argues that the plan favors certain creditors over others unjustly, and the company’s legal team charges Genesis with violating their fiduciary responsibilities and presenting the proposal in bad faith.
DCG Raises Legal Concerns Over Genesis’ Bankruptcy Strategy, Seeks Plan Rejection
Attorneys from Weil, Gotshal, and Manges LLP, representing Digital Currency Group (DCG), have lodged a formal objection against Genesis‘ updated bankruptcy scheme, alleging it contravenes Section 1129 of the Bankruptcy Code. DCG argues the plan constitutes an impermissible “cramdown” that fails to align with legal standards for bankruptcy, purportedly allowing creditors to claim recoveries exceeding the values assessed at the filing date, among other infractions. Adding to the complexity, Genesis operates under the DCG umbrella.
DCG further argues that the scheme’s allocation rules are overly intricate and muddled, breaching certain established norms of bankruptcy legislation. The company maintains that these rules disproportionately benefit a select group of creditors at the expense of others, effectively depriving DCG of significant financial and governance rights. The legal team deems the preferential treatment of certain creditors through setoff rules and the modification of DCG’s rights as an equity holder to be against the law.
“The amended plan also seeks to disenfranchise DCG in a myriad of other ways, including stripping DCG of essentially all its rights in its capacity as an equity holder with no legal authority to do so,” the court filing details. “In short, the amended plan renders DCG an equity holder in name only. This kind of naked seizure of equity holder rights in direct contravention of law and public policy is the very definition of bad faith.”
The DCG attorneys add:
Because the amended plan was not proposed in good faith and violates numerous principles of law, it should be rejected.
DCG’s objection comes on the heels of Genesis seeking authorization to sell off .4 billion in Grayscale’s Bitcoin Trust (GBTC). This move was promptly lauded by the New York-based Gemini, which called it an “important step” toward settling. In the court document filed on Tuesday, DCG expressed disapproval of the process used to craft the revised plan, criticizing it as the outcome of alleged secretive talks that left DCG out and unjustly advantaged certain creditors to the detriment of DCG.
What do you think about DCG’s objection to Genesis’ amended bankruptcy plan? Share your thoughts and opinions about this subject in the comments section below.
Supreme Court Ruling Bolsters Australian FTX Creditors’ Prospects for Full Recovery
The prospects of Australian creditors of the crypto exchange FTX getting all their money back recently received a boost after a judge ruled that only those who initiated Australian dollar withdrawal requests are entitled to a share of the million recovered. Australian investors with crypto-to-crypto withdrawal requests will have to wait for the completion of bankruptcy proceedings in the U.S.
Australian Dollar Withdrawal Requests
A recent ruling by the Victorian Supreme Court in January has increased the likelihood of Australian creditors of the crypto exchange FTX getting all their money back, a report has said. In his ruling, Judge Patricia Matthews clarified that only those who initiated Australian dollar withdrawal requests — about 747 investors — qualify for full reimbursement.
According to a report in the Australian Financial Review, the million collected by the advisory and investment firm Korda Mentha is sufficient to pay back all the 747 investors. The suggestion that Australian investors are set to be made whole follows reports that FTX has prioritized repaying creditors over reviving the platform.
Meanwhile, the Supreme Court judge ruled however that Australian investors with crypto-to-crypto withdrawal requests will have to wait for the completion of bankruptcy proceedings in the U.S. FTX lawyer Andrew Dietderich said he is optimistic that all creditors will be made whole.
“There is still a great amount of work, and risk, between us and that result. But we believe the objective is within reach, and we have a strategy to achieve it,” Dietderich reportedly told a U.S. judge.
In another development, the FTX creditor committee lawyer, Kris Hansen, reportedly emphasized that all reimbursements will be calculated based on prices prevailing at the time of the bankruptcy filing. This stance means that the remarkable surge in the value of cryptocurrencies such as bitcoin (BTC) and Solana (SOL) — which has soared by more than 600% since November 2022 — will not directly translate into higher payouts for creditors.
While this decision has frustrated some creditors, a U.S. judge has ruled that FTX’s reimbursement proposal adheres to legal standards and is above board.
What are your thoughts on this story? Let us know what you think in the comments section below.
Celsius Emerges From Bankruptcy, Begins to Distribute $3 Billion to Creditors
Celsius has concluded its Chapter 11 bankruptcy process and is embarking on a new journey with the launch of Ionic Digital, Inc., a bitcoin mining company managed by Hut 8 Corp. This development follows a complex legal and financial restructuring, which will include over billion distributed to creditors.
Celsius Ends Bankruptcy Saga, Will Return Billion to Creditors
After an eighteen-month bankruptcy process, Celsius Network LLC has emerged from Chapter 11, marking a turnaround in the cryptocurrency industry. The company announced today that it has completed the transactions under its reorganization plan, approved by 98% of its account holders and the Bankruptcy Court for the Southern District of New York on Nov. 9, 2023.
This event concludes a long journey for Celsius, during which the company fielded legal challenges, underwent audits by regulatory investigations, and had to gain stakeholder support. The plan includes distributing over billion in cryptocurrency and fiat to creditors and establishing a new bitcoin mining entity, Ionic Digital, Inc., which will be managed by Hut 8 Corp.
“Our exit from bankruptcy is the culmination of an extraordinary team effort and extensive collaboration between Celsius, Hut 8, strategic partners, and our creditors,” said company representatives David Barse and Alan Carr.
Following the bankruptcy court’s approval, Celsius will transition to the “MiningCo transaction,” consistent with the plan to “maximize recoveries for the benefit of creditors.” The company also increased the availability of funds for creditors by nearly 0 million through altcoin conversions and previous settlements. The company has initiated distributions of liquid cryptocurrency and fiat to creditors, with Ionic Digital set to become publicly traded upon receiving necessary approvals.
Celsius has successfully emerged from bankruptcy on January 31, 2024, concluding the company’s restructuring process. You can read our official announcement here https://t.co/jqQfSzxPyg.
— Celsius (@CelsiusNetwork) February 1, 2024
Matt Prusak, Chief Commercial Officer at Hut 8, has been appointed CEO of Ionic Digital, which will operate under Hut 8’s management for the next four years.
As part of its restructuring, Celsius will wind down its operations, including discontinuing its mobile and web applications. The firm also addressed its legal challenges, including a .7 billion settlement with U.S. authorities over fraud allegations. Former CEO Alex Mashinsky, who resigned in September 2022, faces fraud charges for allegedly manipulating the lender’s CEL token price, which he denies. Mashinsky is currently out on a million bond, with his trial scheduled for September 2024.
How do you think Celsius will fare moving forward as a bitcoin miner? Share your thoughts and opinions about this subject in the comments section below.
Celsius Follows FTX As It Begins Repaying Crypto To Creditors, Here’s How Much
Bankrupt cryptocurrency lending company Celsius Network has followed behind FTX, revealing plans to disburse billions of dollars in crypto to creditors and establish a new Bitcoin mining company for its creditors.
Celsius To Distribute Billion In Crypto To Creditors
In a press release published on Wednesday, Celsius Network announced its successful emergence from bankruptcy. The company is now set to implement its “plan of reorganization,” which involves distributing over billion in crypto assets and fiat currency to its creditors.
The crypto lending company claimed that the reorganization plan has gained approval by approximately 98% of the company’s account holders. Additionally, Celsius disclosed that the plan has been confirmed and accepted by the Bankruptcy Court of the New York Southern District and the United States Securities and Exchange Commission (SEC).
Earlier in 2022, Celsius filed for bankruptcy in New York after becoming one of the many victims of the crypto market’s dramatic plunge which saw major token prices falling to new lows. Subsequently, the crypto lending platform froze all withdrawals, temporarily shutting off account holder’s access to their savings and funds.
Now, 18 months after halting withdrawals, Celsius is finally settled and has initiated steps to reimburse creditors. The crypto lending platform disclosed plans to boost its cryptocurrency distribution to creditors by almost 0 million. This would involve converting altcoins to Bitcoin (BTC) and Ethereum (ETH).
“Our exit from bankruptcy is the culmination of an extraordinary team effort and extensive collaboration between Celsius, Hut 8, strategic partners, and our creditors,” Members of the Special Committee of the Board of Celsius, David Barse and Alan Carr stated.
The conclusion of the long-awaited repayment and the company’s reorganization plans marks a milestone for Celsius as it reflects the organization’s commitment to its creditors. It also underscores its compliance with regulatory obligations and resolvement of intricate legal issues within its business.
Celsius Forges Ahead With Creation Of New Bitcoin Mining Company
As Celsius works to disburse billion to its creditors, the crypto lending platform has also announced plans to create a new Bitcoin mining company, Ionic Digital, Inc. The Bitcoin mining company will be owned by Celsius creditors, and mining operations will be managed by Hut 8 Corp, a North American digital asset mining company.
The objective of the Bitcoin mining company is to consistently provide recoveries to creditors and ensure that the best outcomes are guaranteed for them. After gaining the necessary requisite approvals, Ionic Digital stocks are expected to be publicly traded. Certain shares of the Bitcoin mining company have already been allocated to Celsius creditors.
Additionally, the Chief Commercial Officer (CCO) of Hut 8, Matt Prusak, will assume the role of Chief Executive Officer (CEO) at Ionic Digital. The publication revealed that he will be working with Celsius’s board of directors appointed by the Official Committee of Unsecured Creditors (UCC).
Expert Calms Mt. Gox Bitcoin Liquidation Worries, Says “Creditors Aren’t Likely To Sell Soon”
The ongoing saga of the Mt. Gox exchange casts a shadow over the Bitcoin community, even years after its dramatic collapse. Recent developments have stirred the pot again, with Mt. Gox reaching out to former users to confirm ownership of accounts linked to Bitcoin payments.
This move comes amid ongoing efforts to compensate creditors, primarily in Japanese yen, through their PayPal accounts. With the repayment process expected to continue this year, the crypto community remains on edge regarding the implications of releasing Mt. Gox’s substantial Bitcoin holdings, amounting to 142,000 BTC and 143,000 BCH, in addition to 69 billion yen.
Expert Optimistic Take On Gox Coin Release
Amid the swirling rumors and speculation, renowned Bitcoin advocate and CEO of Jan3, Samson Mow, has stepped forward to offer his perspective, seeking to alleviate concerns regarding the potential market impact of unlocking “Gox coins.”
Mow believes creditors’ long wait has cultivated resilience to prevent a sudden, mass sell-off of these assets. According to Mow, even if some creditors decide to sell, the market is well-equipped to “absorb” the impact without significant disruption.
Gox coins unlocking isn’t really a factor. Creditors having to force HODL for a decade aren’t likely to sell soon. What about buyers of claims? They may have sought fiat gains initially, but had a front row seat to #Bitcoin NgU and should now be thinking “sell for gains in what?”
— Samson Mow (@Excellion) January 24, 2024
This view was echoed in response to a user named Spoonman on X, who suggested that around half of the creditors might be inclined to sell. Mow confidently stated that such selling would not co-occur, reinforcing his belief that the market can handle the situation smoothly.
Even if some sell, they aren’t going to do it all at once. Market can absorb it all easily regardless.
— Samson Mow (@Excellion) January 24, 2024
Bitcoin Unexpected Reversal
Interestingly, the Bitcoin market has recently shown signs of recovery, defying some analysts’ expectations of a continued downturn. At present, Bitcoin is experiencing a 3% increase over the past 24 hours, with its trading price hovering above ,000
However, it’s important to note that this uptick follows a significant decline, with Bitcoin down by 5.7% over the past week and over 10% in recent weeks.
This modest recovery contradicts the bearish forecast presented by Bitfinex in their latest Alpha Report, which anticipated further market downturns. Bitfinex analysts pointed out the vulnerability of Bitcoin’s price due to the reduced profitability of short-term holders.
According to the analyst, this group of investors’ potential reaction to the market conditions could lead to critical support levels being tested at around “,000 and ,000,” as per the report.
However, contrary to prediction, Bitcoin has surged slightly far away from these highlighted support zones. For context, the asset currently trades for ,037 at the time of writing.
Featured image from Unsplash, Chart from TradingView