FTX customers compete for priority payments in the US bankruptcy case

A group of FTX customers will try to achieve a faster repayment for people who have caught money with the no longer existing stock exchange by convincing a US court that customers' cryptoassets remain their property.

lawyers represented by a group of FTX customers who rolled a total of 1.6 mrd in the extensive insolvency process for the crypto empire by Sam Bankman-Fried in the collapse of the stock exchange last month.

The status of customer deposits has developed into a central legal question in the flood of insolvencies of cryptocurrency companies this year, including the collapse of the lenders Celsius Network and Voyager. Customers are classified in the category "general unsecured creditors", which means that they will probably have to wait a long time to get money back, and possibly only receive a few cents for every dollar owed.

In the insolvency proceedings according to Chapter 11,

ftx is faced with up to 1 million creditors, including customers, suppliers and lenders who have to compete with each other for the primary repayment of the company's remaining assets. FTX customers' action is intended to prevent customers from being at the last place when repaying.

"If the assets belong to the customer, there is no line. It is only her fortune," said Erin Broderick, lawyer of the Eversheds Sutherland law firm, which represents the group of FTX clients.

ftx, founded by Bankman-Fried, Fror in November customer withdrawals after a wave of customers had rushed to the outputs. Broderick argues that the terms of use of the collapsed stock exchange support customers who have "property rights" on the funds remaining on their accounts. She said that the law firm is planning to apply to the court at the beginning of the new year at the latest at the beginning of the new year.

ftx did not answer a request for comment.

At the beginning of this month, a judge who monitored the US bankruptcy of the collapsed crypto loan Celsius ordered that a small number of customers should be repaid assets that were never mixed with other cash. In this case, the judge still weighs the difficult question of how to deal with the funds of other customers.

The court asked

Celsius to treat the ownership of the customer's own property, while assets that were pledged for high interest payments in the “EARN” program of the lender are regarded as the property of the company.

The lender Blockfi applied to a US court on Monday to allow him to reopen customer withdrawals of some crypto-bays, which would "give customers access to digital assets that belong to them and were kept in their wallet accounts on the Blockfi platform," said the company in A Submission.

The way to relax for FTX customers is further difficult by claims that up to 10 billion

The 30-year-old former billionaire denied intentional misconduct. He was arrested on the Bahamas last week after the U.S. public prosecutor's office was charged with the fraud.

eversheds Sutherland will argue that, if some customer assets are no longer available for repayment, customers should still receive priority over other groups of creditors.

"We think that it is quite clear in the service conditions that customers have ownership of their assets," said Sarah Paul, partner and co-global Head of Corporate Crime and Investigations at the law firm. "I see it as one of the first problems that need to be addressed."