Objections Raised Against FTX Reimbursement Plan

Introduction

Following the submission of a proposal by FTX estate debtors to reimburse customer assets based on their value as of November 11, 2022, numerous objections have been raised by customers. The objections highlight concerns over the depletion of creditor funds and dissatisfaction with the compensation in fiat currency.

FTX Customers Express Dissatisfaction

FTX customers have expressed significant dissatisfaction with the company's reorganization plan, which proposed compensating customers in fiat currency based on the value of their crypto assets as of November 11, 2022. This dissatisfaction stems from the fact that the valuation of crypto assets was at its lowest in years during that period.

Concerns Over Depleting Creditor Funds

One notable objection comes from an FTX client in France, who criticizes the estate for depleting creditor funds by imposing exorbitant charges for their services. The customer expresses dissatisfaction with the compensation in fiat currency, particularly given the valuation of crypto assets at a point when markets were at their lowest in years.

Losses for Creditors

A customer from Portugal has pointed out that the bankruptcy process is causing significant losses for creditors. This client claims that $500 million in fees have been deducted, which they believe should instead be used to benefit the customers. They argue that this situation creates an incentive for certain parties to prolong the proceedings, thereby accumulating more fees.

Contradiction with Terms of Service

The Portuguese individual further argues that setting the value of crypto assets based on their November 11, 2022, prices contradicts the terms of service (ToS). They believe that the crypto assets belong to the owners and should never have been co-mingled with other funds.

Accusations of Theft

A French customer contends that reimbursing creditors based on the November 2022 valuation of their crypto effectively equates to stealing from the victims. This customer urges the judge to intervene to avert what they describe as a second theft. Another objector disputes the conversion table, noting that their claim's value is 2.55 times higher than the specified date. They argue that approving this proposal would unfairly prejudice a significant class of customers.

Objections and Alternatives

Since the unveiling of the proposal, objections have been steadily accumulating in the court docket hosted by the Kroll Restructuring Administration. Numerous creditors have submitted letters suggesting various alternatives for the judge to consider, rather than adhering to the estate's proposed strategy. Alongside these objections, there is also a notable trend of claims being transferred to different entities.

Market Values for FTX Claims

Current market values for FTX claims show sellers asking for $0.77 on the dollar, while bids are coming in at around $0.72.

What are your thoughts on the objections to the proposed FTX reimbursement plan? Share your opinions in the comments section below.

Frequently Asked Questions

Are gold IRAs a good option for investment?

You can invest in gold by purchasing shares in companies that mine it. To make money in investing in gold or other precious metals, such as silver, you should purchase shares in these companies.

But, owning shares in direct form has two downsides:

If you hold on to your stock for too much time, you risk losing money. Stocks can fall more than their underlying asset (like, gold) when they decline. This could mean that you lose money rather than making it.

You may also miss potential profits if the market recovers before you sell. You may have to wait for the market to recover before you can make a profit on your gold holdings.

If you prefer to keep your investments apart from your finances, physical gold is still an option. An IRA in gold can diversify your portfolio and protect you against inflation.

You can find out more information about gold investing on our website.

Can a gold IRA make you money?

Yes, it is possible. But not as many as you might think. It all depends upon how much risk you are willing and able to take. A $10,000 investment per year for 20 years could lead to $1 million by retirement age. However, if all your eggs are in one basket, then you will lose everything.

Diversify your investments. When there is inflation, gold does well. It is important to invest in assets that increase with inflation. Stocks excel at this because they rise with increased profits. Bonds are also able to do this. They pay interest each year. They are great in times of economic growth.

What happens if there is no inflation? During deflationary periods, bonds fall in value while stocks fall further. This is why investors should not invest all of their savings in one investment, such a bond mutual fund or stock mutual fund.

Instead, they should combine different types funds. They could also invest in bonds and stocks. They could also invest both in bonds and cash.

So they can see both sides of each coin. Inflation and depression. They will still experience a return with time.

How can I choose an IRA?

Understanding the type of account you have is the first step towards finding an IRA that suits your needs. This includes whether you are looking for a traditional IRA or Roth IRA. You should also know how much money your have available to invest.

The next step is determining which provider fits your situation best. Some providers offer both accounts and others only specialize in one.

Consider the fees that come with each option. Fees vary widely between providers and may include annual maintenance fees and other charges. For example, some providers charge a monthly fee based on the number of shares you own. Others may only charge one quarter.

What Precious Metals Can You Invest in for Retirement?

It is important to know what you have already saved and where money you are saving for retirement. You can start by making a list of all your assets. This should include all stocks, bonds, mutual fund, certificates of deposits (CDs), insurance policies, life insurance policies and annuities. Add all these items together to calculate how much money you have for investment.

If you haven't already done so, you may want to consider opening a Roth IRA account if you're younger than 59 1/2 years old. Traditional IRAs allow you to deduct contributions out of your taxable income. Roth IRAs don't. However, you will not be able take tax deductions on future earnings.

If you decide that you need more money you'll need another investment account. Begin with a regular brokerage.

Is it a good idea to have an IRA that holds gold and silver?

This could be a great opportunity for those who want to easily invest in both gold or silver simultaneously. However, there are many other options available as well. You can contact us at any time with questions about these types investments. We're always happy to help!

What is a Precious Metal IRA and How Can You Benefit From It?

Precious Metals are a great way to invest in retirement funds. They have held their value since biblical times. A great way to diversify and protect your portfolio is to invest in precious metals such silver, gold, and platinum.

Certain countries permit citizens to hold their money in foreign currencies. You can buy Canadian gold bars and keep them at home. You can also sell these gold bars for Canadian dollar when you visit family.

This is a simple way to make investments in precious metals. It is particularly useful for those who live outside North America.

Can I have physical possession of gold within my IRA?

Many people ask themselves whether it is possible to physically own gold in an IRA. This is a legitimate question since there is no legal way.

You can still own gold in an IRA if you look at the law.

Most people don’t realize just how much they could save by putting your gold in an IRA, rather than keeping it at home.

It's easy to throw away gold coins but not so easy to put them in an IRA. If you decide that you want to keep your gold at home, you'll be responsible for two tax payments. Once for the IRS and once for the state where you live.

It is possible to lose your gold and pay twice as much tax. Why would you keep your gold in the house?

You may argue that it is necessary to have the assurance that your gold safe in your home. However, to guard yourself against theft, it is worth considering storing your gold in a more secure location.

If you're planning on visiting frequently, it is best to keep your gold safe at home. Theft can easily take your gold when you're not home.

It is better to keep your gold in an insured vault. You can rest assured that your gold is safe from theft, fire, earthquake, flood, and other hazards.

A vault can also be beneficial because you don't need to pay property tax. Instead, you'll have to pay income tax on any gains you make from selling your gold.

You may be interested in an IRA if you don't want to pay taxes on your gold. With an IRA, you won't have to pay income tax even though you earn interest on your gold.

Capital gains tax is not required on gold. If you decide to cash it out, you will have full access to its value.

You won't have to move your gold because IRAs are federally regulated.

The bottom line is that you can own gold in your IRA. Only thing stopping you from owning gold in an IRA is your fear of getting it stolen.

Statistics

If you accidentally make an improper transaction, the IRS will disallow it and count it as a withdrawal so that you would owe income tax on the item's value and, if you are younger than 59 ½, an additional 10% early withdrawal penalty. (forbes.com)
Same tax rules as traditional IRA SEP IRA contributions in 2022 are limited to 25% of compensation or $66,000, whichever is less Before setting up a Silver IRA, understand the fees and IRS restrictions. (sltrib.com)
The IRS also allows American Eagle coins, even though they do not meet gold's 99.5% purity standard. (forbes.com)
SEP-IRA”Simplified employee pension” For self-employed people like independent contractors, freelancers, and small-business ownersSame tax rules as traditional IRASEP IRA contributions in 2022 are limited to 25% of compensation or $66,000, whichever is less4. (sltrib.com)

External Links

How To

How to Determine if a Gold IRA is Right for You

Individual Retirement Account (IRA) is the most popular type. Individual Retirement Accounts (IRAs) are available through financial planners, banks, mutual funds and employers. Individuals can contribute as much as $5,000 per year without any tax consequences. This amount can be contributed to any IRA, regardless of your age. However, there are limits on how much money you can put into certain IRAs. You cannot contribute to a Roth IRA if you are under 59 1/2 years of age. For those who are younger than 50, contributions can only be made after you turn 70 1/2. Individuals who work for their employer could be eligible for matching employer contributions.

There are two main types: Roth and traditional IRAs. A traditional IRA lets you invest in stocks, bonds, real estate, and other investments, while a Roth IRA lets you invest only in after-tax dollars. Roth IRA contributions are not subject to tax when they are made, but Roth IRA withdrawals are. Some people may choose to use both. There are pros and cons to each type of IRA. Before you decide which type of IRA is right for you, what are the pros and cons? These are the three main things you need to remember:

Traditional IRA Pros

Companies have different options when it comes to contribution options
Employer match possible
You can save up to $5,000 per person
Tax-deferred growth until withdrawal
May have restrictions based on income level
The maximum contribution limit is $5,500 per year ($6,500 if married and filing jointly)
Minimum investment: $1,000
After the age of 70 1/2, mandatory distributions must be taken.
You must be at the least five years of age to open an IRA
You cannot transfer assets between IRAs

Roth IRA pros

Contributions are free of taxes
Earnings can grow tax-free
No minimum distribution required
There are only a few investment options available: stocks, bonds and mutual funds.
There is no maximum allowed contribution
There are no restrictions on the transfer of assets between IRAs
You must be at least 55 to open an IRA

If you are thinking about opening an IRA, it is important to be aware that not all companies offer exactly the same IRAs. For instance, some companies offer a choice between a traditional or a Roth IRA. Others allow you to combine them. Noting that different types IRAs have different requirements, it's worth noting. A Roth IRA does not have a minimum investment requirement. Traditional IRAs require a minimum of $1,000.

The Bottom Line

When choosing an IRA, the critical factor is whether you want to pay taxes now or later. If you're planning to retire in the next ten-years, a traditional IRA may be the best option. Otherwise, a Roth IRA could be a better fit for you. In either case, it's a smart idea to speak with a professional about your retirement plans. Someone who understands the market will be able to recommend the best options.

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By: Jamie Redman
Title: Objections Raised Against FTX Reimbursement Plan
Sourced From: news.bitcoin.com/ftx-payment-plan-faces-backlash-clients-slam-2022-asset-valuation-as-theft-urge-court-for-fair-redress/
Published Date: Mon, 22 Jan 2024 19:00:35 +0000