FTX estate’s new plan would value creditor assets at time of bankruptcy

Happy Sunday!

The FTX estate filed an amended plan that would value creditor claims retroactively to the exchange’s bankruptcy in 2022, a former security engineer was convicted of hacking a smart contract, and Meta apologised to a Qatari billionaire. Read on!

FTX values assets at time of bankruptcy

The FTX estate, led by CEO John Ray III, filed an amended Chapter 11 reorganisation plan that would value creditors’ digital-asset claims at their conversion rates on the date of the bankruptcy filing, which was November 11, 2022.

Most crypto prices have increased since that time, meaning creditors could lose out on potential gains. Bitcoin, for example, was then valued at about $17,000, but is now hovering around $42,000. Ether and Solana have also made big gains since then.

FTX creditor Sunil Kavuri argued in a post on X that the reorganisation plan ignores the exchange’s terms of service, which state that “digital assets are the property of users and not FTX Trading.”

If the plan is approved, the value of claims will be determined by rates specified in a conversion table.

Engineer convicted in hacking smart contract

A senior security engineer pleaded guilty to hacking two crypto exchanges, including Nirvana Finance, resulting in the first ever conviction for hacking a smart contract, according to a statement from the US Attorney for the Southern District of New York.

Shakeeb Ahmed faces as many as five years in prison and will forfeit $12.3 million worth of stolen crypto. US Attorney Damian Williams said: “Ahmed used his technical knowhow to steal over $12 million and tried to cover his tracks by swapping stolen crypto for Monero, using cryptocurrency mixers, hopping across blockchains, and utilising overseas crypto exchanges. Today’s conviction shows that no matter how sophisticated the methods used, fraud is fraud.”

Meta apologises over false advertisements

Meta, owner of Facebook, apologised publicly to Qatari billionaire Wissam al Mana and promised extra protection after his image was used in crypto scam advertisements on the social media platform, the Financial Times reported.

Meta admitted in a Dublin court that “throughout 2019, several false, misleading and defamatory advertisements were published on Facebook by malicious third parties, featuring the image of Mr Wissam Al Mana, without his knowledge or consent.”

Basel bankers see less risk in stablecoins

The Basel Committee on Banking Supervision, a global standard setter for the prudential regulation of banks, proposed that stablecoins with “effective stabilisation mechanisms” be considered less risky than unbacked digital assets such as Bitcoin.

The committee recommends a maximum possible risk weight of 1,250% for publicly traded cryptocurrencies such as Bitcoin, meaning banks must match their risks with capital and cannot allocate more than 2% of their core capital to them.

NFT Trader hacked, losses in millions

NFT Trader suffered a security breach that allowed hackers to steal millions of dollars worth of NFTs, Cointelegraph reported. The company confirmed the incident in an X post.

At least 13 Mutant Ape Yacht Club and 37 Bored Ape tokens were among the losses, which amounted to almost $3 million, the report said.

What we’re reading around the web

The Countdown for a Bitcoin ETF Decision Is Approaching a Critical Deadline — Bloomberg

‘The SEC is busier than Santa’s elves’ as BlackRock, Fidelity meetings fuel Bitcoin ETF hype — DL News

Cathie Wood Thinks Bitcoin Could Skyrocket 3,356% By 2030. Is She Right? — The Motley Fool