FTX Clients Criticize Valuation of Crypto Assets
Following the submission of a proposal by FTX estate debtors to reimburse customer assets based on their value as of Nov. 11, 2022, numerous objections have been raised by customers. A notable objection comes from an FTX client in France, who criticizes the estate for depleting creditor funds by imposing exorbitant charges for their services. This 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.
Reorganization Plan Faces Significant Dissatisfaction
FTX clients 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 Nov. 11, 2022 — the day the now-insolvent crypto exchange declared Chapter 11 bankruptcy. For example, while bitcoin (BTC) currently trades just above $40,000, the Digital Asset Conversion Table values it at only $16,871 per coin. Following this proposal, the bankruptcy court docket has been inundated with several objections.
Significant Losses for Creditors and Contradiction with Terms of Service
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 he believes should instead be used to benefit the customers. He observes that this situation creates an incentive for certain parties to prolong the proceedings, thereby accumulating more fees. Moreover, this Portuguese individual argues that setting the value of crypto assets based on their Nov. 11, 2022, prices contradicts the terms of service (ToS).
Reimbursing Based on Crypto Valuation Equals "Stealing"
Meanwhile, a French customer contends that reimbursing creditors based on the November 2022 valuation of their crypto effectively equates to stealing from the victims. In a letter to Judge Dorsey, 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. This client further points out that the FTX ToS clearly states that the crypto assets belong to the owners and should never have been co-mingled with other funds.
Objections and Alternative Proposals
Ever since its unveiling in December 2023, the proposal has been met with a steady stream of objections, 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's also a notable trend of claims being transferred to different entities. 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 do you think about the objections to the proposed FTX reimbursement plan? Share your thoughts and opinions about this subject in the comments section below.
Frequently Asked Questions
What are the benefits to having a gold IRA
It is best to put your retirement money in an Individual Retirement Account (IRA). It's tax-deferred until you withdraw it. You are in complete control of how much you take out each fiscal year. And there are many different types of IRAs. Some are better suited for people who want to save for college expenses. Others are designed for investors looking for higher returns. Roth IRAs are a way for individuals to make contributions after the age of 59 1/2, and then pay taxes on any earnings upon retirement. But once they start withdrawing funds, those earnings aren't taxed again. This account may be worth considering if you are looking to retire earlier.
An IRA with a gold status is like any other IRA because you can put money into different asset classes. Unlike a regular IRA that requires you to pay taxes on the gains you make while you wait to access them, a gold IRA does not have to do this. For people who would rather invest than spend their money, gold IRA accounts are a good option.
An additional benefit to owning gold through an IRA, is the ease of automatic withdrawals. This means that you don't need to worry about making monthly deposits. To avoid missing a payment, direct debits can be set up.
Finally, the gold investment is among the most reliable. Because it's not tied to any particular country, its value tends to remain steady. Even during economic turmoil the gold price tends to remain fairly stable. Gold is a good option for protecting your savings from inflation.
Should you Invest In Gold For Retirement?
It depends on how much you have saved and if gold was available at the time you started saving. Consider investing in both.
In addition to being a safe investment, gold also offers potential returns. Retirement investors will find gold a worthy investment.
Gold is more volatile than most other investments. Because of this, gold's value can fluctuate over time.
This doesn't mean that you should not invest in gold. This just means you need to account for fluctuations in your overall portfolio.
Another advantage of gold is its tangible nature. Gold is more convenient than bonds or stocks because it can be stored easily. It is also easily portable.
As long as you keep your gold in a secure location, you can always access it. Plus, there are no storage fees associated with holding physical gold.
Investing in gold can help protect against inflation. You can hedge against rising costs by investing in gold, which tends to rise alongside other commodities.
Additionally, it will be a benefit to have some of your savings invested into something that won't lose value. Gold usually rises when the stock market falls.
Gold investment has another advantage: You can sell it anytime. You can easily liquidate your investment, just as with stocks. You don't even have to wait until you retire.
If you do decide to invest in gold, make sure to diversify your holdings. Don't place all your eggs in the same basket.
Don't buy too many at once. Start by purchasing a few ounces. Continue adding more as necessary.
Keep in mind that the goal is not to quickly become wealthy. Rather, it's to build up enough wealth so you won't need to rely on Social Security benefits.
Even though gold is not the best investment, it could be an excellent addition to any retirement plan.
How much of your portfolio should be in precious metals?
First, let's define precious metals to answer the question. Precious elements are those elements which have a high price relative to other commodities. This makes them extremely valuable for trading and investing. Gold is by far the most common precious metal traded today.
But, there are other types of precious metals available, including platinum and silver. While gold's price fluctuates during economic turmoil, it tends to remain relatively stable. It is also relatively unaffected both by inflation and deflation.
All precious metals prices tend to rise with the overall market. They do not always move in the same direction. For example, when the economy is doing poorly, the price of gold typically rises while the prices of other precious metals tend to fall. Investors expect lower interest rate, making bonds less appealing investments.
The opposite effect happens when the economy is strong. Investors choose safe assets such Treasury Bonds over precious metals. Because they are rare, they become more pricey and lose value.
Therefore, to maximize profits from investing in precious metals, you must diversify across multiple precious metals. Furthermore, because the price of precious Metals fluctuates, it is best not to focus on just one type of precious Metals.
Should you open a Precious Metal IRA
The most important thing you should know before opening an IRA account is that precious metals are not covered by insurance. It is impossible to get back money if you lose your investment. This includes all investments that are lost to theft, fire, flood, or other causes.
Protect yourself against this type of loss by investing in physical gold or silver coins. These items are timeless and have a lifetime value. They are likely to fetch more today than the price you paid for them in their original form.
When opening an IRA account, make sure you choose a reputable company offering competitive rates and high-quality products. You should also consider using a third party custodian to protect your assets and give you access at any time.
When you open an account, keep in mind that you won't receive any returns until your retirement. So, don't forget about the future!
Statistics
- This is a 15% margin that has shown no stable direction of growth but fluctuates seemingly at random. (smartasset.com)
- Indeed, several financial advisers interviewed for this article suggest you invest 5 to 15 percent of your portfolio in gold, just in case. (aarp.org)
- You can only purchase gold bars at least 99.5% purity. (forbes.com)
- The price of gold jumped 131 percent from late 2007 to September 2011, when it hit a high of $1,921 an ounce, according to the World Gold Council. (aarp.org)
- Instead, the economy improved, stocks rebounded, and gold plunged, losing 28 percent of its value in 2013. (aarp.org)
External Links
bbb.org
finance.yahoo.com
wsj.com
- Saddam Hussein's Invasion Helped Uncage a Bear In 1990 – WSJ
- You want to keep gold in your IRA at home? It's Not Exactly Legal – WSJ
investopedia.com
How To
How to Hold Physical Gold in an IRA
The best way of investing in gold is to purchase shares from companies that produce gold. But, this approach comes with risks. These companies may not survive the next few years. Even if the company survives, they still face the risk of losing their investment due to fluctuations in gold's price.
Another option is to purchase physical gold. You will need to either open an online or bank account or simply buy gold from a reliable seller. This option has many advantages, including the ease of access (you don’t have to deal with stock markets) and the ability of making purchases at low prices. It is also easier to check how much gold you have stored. You'll get a receipt showing exactly what you paid, so you'll know if any taxes were missed. You are also less likely to be robbed than investing in stocks.
However, there are disadvantages. You won't be able to benefit from investment funds or interest rates offered by banks. It won't allow you to diversify any of your holdings. Instead, you'll be stuck with what's been bought. Finally, the tax man might ask questions about where you've put your gold!
If you'd like to learn more about buying gold in an IRA, visit the website of BullionVault.com today!
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By: Jamie Redman
Title: FTX Customers Express Dissatisfaction with Repayment 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
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