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FTX to retrieve user funds? Team reorganization targets those who withdrew before bankruptcy, tens of thousands of users may be affected

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FTX to retrieve user funds? Team reorganization targets those who withdrew before bankruptcy, tens of thousands of users may be affected

According to the latest briefing from bankruptcy trustee Kroll 9/11, while the restructuring team continues to pursue improper investments and borrowed funds by former FTX executives, they also seem to be shifting their focus to the withdrawal funds of numerous retail investors before the declaration of bankruptcy by FTX.

FTX Calculates Retrieval of "User Withdrawal Funds" Pre-Bankruptcy

The restructuring party has been continuously pursuing Clawback funds from FTX's previous stakeholders, with a 90-day pre-bankruptcy statute of limitations to recover improperly transferred assets to maximize the interests of creditors.

In pages 19 and 20 of the presentation, the restructuring party lists the total withdrawal amounts of users within 15, 30, 60, and 90 days before the bankruptcy.

If calculated within the broadest range of 90 days, the affected funds could amount to as high as $25 billion, with 370,789 FTX + FTX US users.

The calculation of "user withdrawal amounts" by the restructuring party excludes certain scenarios from pursuit, such as:

  1. Subsequent deposits by users offsetting withdrawal amounts

  2. Transfers between FTX and FTX US not included in the calculation

  3. If subsequent deposits exceed the withdrawal amount within 90 days, the remaining priority claim balance will be reduced to zero

Additionally, assets deposited by users are calculated at the price at the time of deposit, while assets withdrawn are calculated at the current market price.

Asset Managers, Creditors: Aggressive Claiming Approach

Travis Kling, founder of asset management firm Ikigai Asset Management, expressed pessimism towards the restructuring party's actions, emphasizing that this is the first time the restructuring party has specifically targeted users who withdrew funds within 15 days before FTX's bankruptcy, as reported by CoinDesk and Binance.

He also pointed out that the restructuring party's calculation of user deposits and withdrawals in different periods is an aggressive Clawback approach. If this materializes, it could affect thousands of users.

Note: Travis Kling previously stated that almost all of the company's assets were placed on FTX after the bankruptcy

Is this FTX's Restructuring Party's Delayed Fee Tactic?

According to the presentation, there are 2,451 users who withdrew over $500,000 in the 15 days before the bankruptcy, leading to an operational issue:

Will the restructuring party sue users globally and pursue small amounts of funds?

Travis Kling believes that the restructuring party could easily reduce the claims of retail creditors to zero, speculating that this move could save at least $500 million in claim funds.

Travis Kling expressed surprise at the restructuring party's actions, stating that he would seek more information at the hearing on September 13.