Crypto Flexs
  • DIRECTORY
  • CRYPTO
    • ETHEREUM
    • BITCOIN
    • ALTCOIN
  • BLOCKCHAIN
  • EXCHANGE
  • TRADING
  • HACKING
  • SLOT
  • CASINO
  • SUBMIT
Crypto Flexs
  • DIRECTORY
  • CRYPTO
    • ETHEREUM
    • BITCOIN
    • ALTCOIN
  • BLOCKCHAIN
  • EXCHANGE
  • TRADING
  • HACKING
  • SLOT
  • CASINO
  • SUBMIT
Crypto Flexs
Home»TRADING NEWS»FTX Proposes Controversial Exemption Clause in Revised Bankruptcy Plan
TRADING NEWS

FTX Proposes Controversial Exemption Clause in Revised Bankruptcy Plan

By Crypto FlexsMay 8, 20243 Mins Read
Facebook Twitter Pinterest LinkedIn Tumblr Email
FTX Proposes Controversial Exemption Clause in Revised Bankruptcy Plan
Share
Facebook Twitter LinkedIn Pinterest Email

Controversy between legally exempt creditors of Sullivan & Cromwell Sparks

Bankrupt cryptocurrency exchange FTX has introduced new amendments to its creditor repayment proposal that include a controversial exemption clause. If approved, this provision would release bankruptcy law firm Sullivan & Cromwell (S&C), along with all debtors, from future liability arising from its conduct during the bankruptcy proceedings.

Details of Exemption Clauses

The amendment announced on May 7 aimed to secure billions in compensation to creditors, but it included an exemption clause, causing dissatisfaction. This legal provision seeks to protect certain parties from liability for damages resulting from bankruptcy enforcement. According to Sunil, a prominent creditor of FTX and member of the FTX Customer Special Committee, the provisions appear to be designed to protect S&C from potential liabilities, such as alleged discount sales of FTX assets to customers and insiders, and its decision to oppose the FTX 2.0 restart. .

Exemption clause. source: Sunil

Creditor opposition and legal background

The provisions come nearly three months after FTX’s top creditors filed a lawsuit against Sullivan & Cromwell, accusing the company of complicity in FTX’s alleged multibillion-dollar fraud. Creditors argued that S&C knew of the fraudulent activity and was able to financially benefit from it, thereby implying that the company supported FTX’s illegal conduct for its own benefit.

Financial Impact and Creditor Response

The proposal has sparked outrage among the cryptocurrency investment community, especially because of the implications of the exemption provisions that could lead some creditors to vote against the plan. Under the plan, more than 98% of creditors would receive an 11% dividend, with additional compensation expected to run into billions of dollars. However, the compensation is based on a Bitcoin price of $16,800, which many creditors find unacceptable considering Bitcoin’s significant rise since the FTX collapse.

0% of FTX creditors agree that they will be fully compensated if they receive $16800 in Bitcoin.

I understand why the bankruptcy process has to proceed this way. But let’s not pretend that victims got their money back or that FTX wasn’t as horrible as it used to be. https://t.co/odVp4rT7hP

— Mike Belshe (@mikebelshe) May 8, 2024

Statement from an industry leader

BitGo CEO Mike Belshe expressed frustration in a post that FTX creditors would not find adequate compensation because the proposed Bitcoin price does not reflect the current market value. While he acknowledged the procedural necessity of bankruptcy proceedings, he criticized the notion that creditors would be fully compensated and that the aftermath of FTX was not disastrous.

Share. Facebook Twitter Pinterest LinkedIn Tumblr Email

Related Posts

Linea Price Spikes 14% as Swift selects Linea for the pilot

September 27, 2025

How to solve the XPL perp defect

September 26, 2025

Are you doing a fair deal?

September 25, 2025
Add A Comment

Comments are closed.

Recent Posts

Linea Price Spikes 14% as Swift selects Linea for the pilot

September 27, 2025

Futuromining Reaches $5,700 Daily Income Milestone For XRP Users

September 26, 2025

CoinFerenceX 2025 Unites Global Web3 Innovators In Singapore On September 29

September 26, 2025

Pepeto Highlights $6.8M Presale Amid Ethereum’s Price Moves And Opportunities

September 26, 2025

LYS Labs Moves Beyond Data And Aims To Become The Operating System For Automated Global Finance

September 26, 2025

Dexari Unveils $1M Cash Prize Trading Competition

September 26, 2025

How to solve the XPL perp defect

September 26, 2025

Detect the full execution bug with the induction pursing of Wake

September 25, 2025

KuCoin Appeals FINTRAC Decision, Reaffirms Commitment To Compliance

September 25, 2025

Phemex Revamps Blog To Deliver Deeper Insights And Enhanced Reader Experience

September 25, 2025

T-REX Launches Intelligence Layer To Fix Web3’s Value Distribution Problem

September 25, 2025

Crypto Flexs is a Professional Cryptocurrency News Platform. Here we will provide you only interesting content, which you will like very much. We’re dedicated to providing you the best of Cryptocurrency. We hope you enjoy our Cryptocurrency News as much as we enjoy offering them to you.

Contact Us : Partner(@)Cryptoflexs.com

Top Insights

Linea Price Spikes 14% as Swift selects Linea for the pilot

September 27, 2025

Futuromining Reaches $5,700 Daily Income Milestone For XRP Users

September 26, 2025

CoinFerenceX 2025 Unites Global Web3 Innovators In Singapore On September 29

September 26, 2025
Most Popular

Meme Ai Price Prediction: MEMEAI Soars 29%, But Experts Say Consider This New Solana Meme Coin For 100X Gains.

May 30, 2024

Toncoin – Mixed signals after TON price falls below $6 again

September 28, 2024

IBM develops big data and AI mathematics science.

June 8, 2025
  • Home
  • About Us
  • Contact Us
  • Disclaimer
  • Privacy Policy
  • Terms and Conditions
© 2025 Crypto Flexs

Type above and press Enter to search. Press Esc to cancel.