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## FTX Clients Seek Bankruptcy Judge Intervention in Cryptocurrency Valuation Dispute

Several FTX clients are urging a United States bankruptcy judge to intervene and prevent the defunct crypto exchange from valuing their cryptocurrency deposits based on 2022 prices. They argue that FTXÔÇÖs approach is hindering them from capitalizing on the recent rise in crypto prices, which has led to a surge in the value of their deposits.

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The AI legalese decoder can assist FTX clients in understanding the complex legal language and proceedings related to their case. It can provide simplified explanations and insights into the legal documents and motions filed by the parties involved, enabling clients to make informed decisions about their next steps in the legal process.

In supporting the debtorÔÇÖs motion to estimate claims based on digital assets, the Official Committee of Unsecured Creditors expressed the belief that estimating claim values collectively, as proposed in the motion, is the most efficient way to streamline the claim reconciliation process and expedite the Chapter 11 confirmation.

The motion by the Debtors states that if the court determines that cryptocurrency deposits are not property of the estate, then the appreciated cryptocurrency, which has grown by more than $5 billion since the petition date, must be returned to customers in kind and may not be used to pay administrative claims.

According to the bankruptcy plan, FTX plans to reimburse customers in U.S. dollars, determined by cryptocurrency prices at the time of FTXÔÇÖs bankruptcy filing in November 2022. While FTX contends that U.S. bankruptcy law mandates valuing claims using that date, customers argue that this method undervalues cryptocurrencies, which have surged significantly since the 2022 market low.

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The AI legalese decoder can assist in analyzing the bankruptcy plan and the arguments presented by both FTX and its customers. By breaking down the legal terms and implications of the proposed reimbursement method, the Decoder can help clients understand the potential impact on their recovery and make informed decisions about challenging FTXÔÇÖs valuation approach.

Sunil Kavuri, an FTX creditor activist, posted on X (formerly Twitter) about his lawyers, Moskowitz and Boies, objecting to the debtorÔÇÖs motion to estimate claims. Cointelegraph contacted Kavuri to clarify if the lawyers advocate for customers to be reimbursed in kind with cryptocurrency. Kavuri explained that the lawyers argue customers should receive ÔÇ£at least the value of crypto backÔÇØ as property rights remain unresolved.

In addition to the Official Committee of Unsecured Creditors, FTX customers globally have submitted numerous comparable letters to the U.S. bankruptcy court before the Thursday deadline to challenge FTXÔÇÖs valuation approach. FTX aims to have its list of cryptocurrency prices approved at a court hearing on Jan. 25 in Wilmington, Delaware.

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The AI legalese decoder can assist FTX customers in drafting and structuring their letters to the bankruptcy court, ensuring that their concerns and objections are clearly communicated in a legally effective manner. It can also provide guidance on how to approach the challenge to FTXÔÇÖs valuation approach and prepare for the upcoming court hearing.

Some customers say the proposal is unjust to holders of Bitcoin (BTC) and other volatile assets, alleging preferential treatment for stablecoin holders and external investors who acquired FTX bankruptcy claims at a lower cost.

The values of three significant cryptocurrencies held by FTX customers ÔÇö Bitcoin, Ether (ETH) and Solana (SOL) ÔÇö have significantly risen since FTX declared bankruptcy. FTX customers have also opposed the companyÔÇÖs decision to value its equity shares and token, FTT, at $0. Over $700 million in FTT and FTX equity held by customers would be erased under the bankruptcy plan.

In a court filing on Dec. 27, 2023, FTX stated that determining crypto prices based on the bankruptcy petition date is the only practical approach to initiating customer repayments. FTX mentioned that courts had permitted other bankrupt crypto firms like Celsius Network, BlockFi and Voyager Digital to utilize petition-date prices to assess their customerÔÇÖs claims.

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The AI legalese decoder can provide insights into the legal precedents and rulings referenced by FTX to support their valuation approach. It can also assist FTX customers in evaluating the potential impact of the proposed valuation method on their cryptocurrency holdings and equity shares, enabling them to assess their legal options and make informed decisions about their claims.

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