Introduction
FTX estate debtors recently submitted a proposal to reimburse customer assets based on their value as of November 11, 2022. However, this plan has faced significant objections from FTX customers, who are dissatisfied with various aspects of the proposed compensation. Let's delve into the objections raised and the concerns expressed by these customers.
Objection 1: Depleting Creditor Funds
A notable objection comes from an FTX client in France, who accuses the estate of depleting creditor funds through the imposition of exorbitant charges for their services. This customer expresses dissatisfaction with the compensation offered in fiat currency, especially considering the valuation of crypto assets during a time when markets were at their lowest in years.
Objection 2: Dissatisfaction with Fiat Compensation
FTX customers have expressed significant dissatisfaction with the company's reorganization plan, which proposes compensating customers in fiat currency based on the value of their crypto assets as of November 11, 2022 – the day the crypto exchange declared Chapter 11 bankruptcy. Despite the current trading value of bitcoin (BTC) being above $40,000, the proposed "Digital Asset Conversion Table" values it at only $16,871 per coin. This has led to multiple objections being raised in the bankruptcy court docket.
Objection 3: Significant Losses for Creditors
A customer from Portugal has highlighted the significant losses faced by creditors due to the bankruptcy process. This customer claims that $500 million in fees have been deducted, which they believe should be used to benefit the customers instead. They argue that this situation creates an incentive for certain parties to prolong the proceedings, accumulating more fees. Additionally, this individual argues that setting the value of crypto assets based on their November 11, 2022, prices contradicts the terms of service (ToS).
Objection 4: Equating Reimbursement to Theft
Another objection comes from a French customer who believes that reimbursing creditors based on the November 2022 valuation of their crypto assets effectively amounts to stealing from the victims. In a letter to Judge Dorsey, this customer urges the judge to intervene and prevent what they describe as a second theft. Another objector disputes the conversion table, stating 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 also 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.
Alternative Suggestions and Market Values
Since its unveiling in December 2023, the proposed reimbursement plan has faced a steady stream of objections. Creditors have submitted letters suggesting various alternatives to the judge, rather than accepting the estate's proposed strategy. Additionally, there has been a 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.
Conclusion
The objections raised by FTX customers regarding the proposed reimbursement plan highlight their dissatisfaction with the compensation offered and the valuation of their crypto assets. These objections and alternative suggestions will be taken into consideration as the bankruptcy proceedings continue. What are your thoughts on these objections? Share your opinions in the comments section below.
Frequently Asked Questions
How much should precious metals be included in your portfolio?
Physical gold is the best investment to protect yourself against inflation. This is because you not only get the current price but also the future value when you invest precious metals. You can expect your investment to increase in value with the rise of metal prices.
Gains will be taxed if you keep your investments for at minimum five years. After that time, capital gains taxes will be due. Our website has more information about how to purchase gold coins.
What is a Precious Metal IRA?
Precious metals make a great investment in retirement accounts. They are a timeless investment that has held its value since the beginning of time. It is a great way of diversifying your portfolio and protecting against inflation by investing in precious metals like gold, silver, or platinum.
In addition, some countries allow citizens to store their money in foreign currencies. You can buy gold bars in Canada and keep them at home. Then, when you go back to visit family, you can sell those same gold bars for Canadian dollars.
This is a simple way to make investments in precious metals. This is especially helpful if you don't live in North America.
Which type of IRA works best?
When selecting an IRA for yourself, the most important thing is to find one that meets your lifestyle and goals. It is important to consider whether you want tax-deferred, maximized growth of your contributions, reduced taxes now and paid penalties later, or just avoid taxes.
If you're saving for retirement and don't have much money invested, the Roth option could make sense. If you plan to continue working beyond age 59 1/2, and pay income taxes on any account withdrawals, the Roth option may be a good choice.
The traditional IRA is better if you want to retire earlier because you will likely owe tax on your earnings. The Roth IRA is a better option if you plan to continue working well beyond age 65. It allows you to withdraw any or all of your earnings and not pay taxes.
What is the best precious metal to invest in?
High returns on capital are possible with gold investments. It protects against inflation, as well as other risks. As people become worried about inflation, the value of gold tends rise.
It's a good idea to purchase gold futures. These contracts will guarantee that you will receive a specific amount of gold at an agreed price.
However, gold futures aren't suitable for everyone. Some people prefer to own physical gold instead.
They can easily trade their gold with others. They can also easily sell it whenever they like.
Many people prefer not to pay taxes on their gold. To do that, they buy gold directly from the government.
This will require several trips to your local Post Office. You must first convert any existing gold into coins or bars.
Then, you need to get a stamp on those coins or bars. Finally, send them off to the US Mint. They will then melt down the bars and coins to create new coins.
These new bars and coins have the original stamps stamped on them. They are therefore legal tender.
However, if you purchase gold directly from the US Mint you won't be required to pay any taxes.
Which precious metal would you prefer to invest in?
Which type of IRA could be used for precious metals
Employers and financial institutions often offer Individual Retirement Accounts (IRA) as an investment vehicle. A IRA is a way to make money and allow it to grow tax-deferred, until you withdraw it.
You can save taxes by setting up an IRA and then paying them off when you retire. This means you can save money and pay taxes later on the money that you have deposited to your retirement account.
An IRA is a great investment because your earnings and contributions are tax-free. You can withdraw funds at any time. When you do, there are penalties for early withdrawal.
After 50 you can still make contributions to your IRA. There is no penalty. If you decide to withdraw your IRA from retirement, you will owe income taxes as well as a 10% federal penalty.
Refunds received before the age of 591/2 are subject to a penalty of 5% from the IRS. There is a 3.4% penalty for withdrawals between the ages 70 1/2 and 59 1/2.
An IRS penalty of 6.2% applies to withdrawals above $10,000 per year.
What is the cost of gold IRA fees
An individual retirement account's average annual fee (IRA) costs $1,000. There are many types available: SIMPLE IRAs (SEP-IRAs), Roth IRAs, Traditional IRAs and Roth IRAs. Each type has its own set requirements and rules. If you don't have tax-deferred investments, then earnings may need to be taxed. It is important to consider how long you plan on keeping the money. If you plan on holding onto your funds for longer, you'll likely save more money by opening a Traditional IRA rather than a Roth IRA.
A traditional IRA allows you to contribute up to $5,500 per year ($6,500 if you're 50 or older). A Roth IRA lets you contribute unlimited amounts each year. The difference is that a traditional IRA allows you to withdraw your money without having to pay taxes. On the other hand, you'll owe taxes on any withdrawals made from a Roth IRA.
Can you make money in a gold IRA
If you want to make money on an investment, you need to do two things firstly, understand how the market operates, and secondly, know what kind of products are available.
Trading should not be started if you don’t have sufficient information.
You should also find a broker who offers the best service for your account type.
There are many accounts available, including Roth IRAs and standard IRAs.
If you have other investments such as bonds or stocks, you might also consider a rollover.
Statistics
- Silver must be 99.9% pure • (forbes.com)
- Depending on your financial situation, most experts recommend you invest no more than 5% to 10% of your retirement funds in precious metals. (forbes.com)
- You can only purchase gold bars of at least 99.5% purity. (forbes.com)
- 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)
External Links
wsj.com
forbes.com
- Gold IRA, Add Some Sparkle to Your Retirement Nest egg
- Understanding China's Evergrande Crisis – Forbes Advisor
kitco.com
takemetothesite.com
How To
Things to Remember: Best Precious Metals Ira, 2022
Precious Metals Ira has become a popular choice for investors. This article will show you how to invest in precious metals and what makes it so appealing.
Their long-term growth potential is the main draw of these assets. Looking back at historical data, we see that gold prices have shown incredible returns. Over the past 200-years, gold prices have gone from $20 per ounce up to $1900 per ounce. The S&P 500 Index was only up by 50%.
In times of economic uncertainty, gold is often considered a safe haven. Stock market downturns cause people to sell their stocks and seek safety in gold. Inflation is also a hedge, so gold can be used as a security measure. Many economists believe in inflation. Accordingly, many economists believe that inflation will always be present. Therefore, physical gold can be considered a way for you to safeguard your savings from future price rises.
Before you buy any precious metal, such as silver, gold, palladium or platinum, there are some things you should consider. You must first decide whether you wish to invest in bullion coins or bars. Bullion bars can be bought in large quantities (like 100-ounces) and kept aside until required. Coins are smaller versions of bullion bars, which can then be used to buy small amounts of bullion.
Second, you should consider where you plan to store your precious metals. Certain countries are more secure than others. It might make sense to store precious metals in another country if you reside in the US. But if you're planning on storing them in Switzerland, you might want to ask yourself why.
Finally, decide whether you want investment in precious metals directly (or through precious metals exchange traded funds) (ETFs). ETFs track the performance of various commodities such as gold and are financial instruments. These instruments can be used to expose you to precious metals without needing to own them.
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