FTX Clients Criticize Valuation of Crypto Assets in Reimbursement Plan
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 from FTX Customers
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.
Bankruptcy Process Causes Losses for Creditors, Claims Portuguese Customer
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).
French Customer Accuses FTX of "Stealing" from Victims in Reimbursement Plan
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 Accumulate in FTX Bankruptcy Court Docket
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 are your thoughts on the objections to the proposed FTX reimbursement plan? Share your opinions in the comments section below.
Frequently Asked Questions
What are the advantages of a gold IRA
The best way to save money for retirement is to place it in an Individual Retirement Account. It's not subject to tax until you withdraw it. You are in complete control of how much you take out each fiscal year. There are many types and types of IRAs. Some are better suited for college students. Others are made for investors seeking 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. The earnings earned after they withdraw the funds aren't subject to any tax. This type of account might be a good choice if your goal is to retire early.
A gold IRA is similar to other IRAs because it allows you to invest money in various 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. This makes gold IRA accounts a great choice for those who want their money to be invested, not spent.
Another advantage to owning gold via an IRA is the ease of automatic withdraws. This means that you don't need to worry about making monthly deposits. Direct debits could be set up to ensure you don't miss a single payment.
Finally, gold is one of the safest investment choices available today. Because it isn’t tied to any specific country, gold’s value tends to stay stable. Even in economic turmoil, gold prices tends to remain relatively stable. As a result, it's often considered a good choice when protecting your savings from inflation.
Can the government take your gold?
The government cannot take your gold because you own it. It's yours, and you earned it by working hard. It is yours. This rule could be broken by exceptions. You can lose your gold if you have been convicted for fraud against the federal governments. You can also lose precious metals if you owe taxes. However, even though your taxes have not been paid, you can still keep your precious metals, even though they are considered the property of United States Government.
What are the fees associated with an IRA for gold?
The Individual Retirement Account (IRA), fee is $6 per monthly. This fee covers account maintenance fees, as well any investment costs that may be associated with your investments.
To diversify your portfolio you might need to pay additional charges. The type of IRA you choose will determine the fees. Some companies offer checking accounts for free, while others charge monthly fees for IRA account.
In addition, most providers charge annual management fees. These fees range from 0% to 1%. The average rate is.25% annually. These rates can be waived if the broker is TD Ameritrade.
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. You can invest in both options if you aren't sure which option is best for you.
You can earn potential returns on your investment of gold. Retirement investors will find gold a worthy investment.
While most investments offer fixed rates of return, gold tends to fluctuate. Therefore, its value is subject to change over time.
This does not mean you shouldn’t invest in gold. This just means you need to account for fluctuations in your overall portfolio.
Another benefit to gold? It's a tangible asset. Gold can be stored more easily than stocks and bonds. It can be easily transported.
You can always access gold as long your place it safe. Additionally, physical gold does not require storage fees.
Investing in gold can help protect against inflation. Because gold prices tend to rise along with other commodities, it's a good way to hedge against rising costs.
Additionally, it will be a benefit to have some of your savings invested into something that won't lose value. Gold usually rises when stocks fall.
Another advantage to investing in gold is the ability to sell it whenever you wish. Just like stocks, you can liquidate your position whenever you need cash. It doesn't matter if you are retiring.
If you do decide to invest in gold, make sure to diversify your holdings. You shouldn't try to put all of your eggs into one basket.
Do not buy too much at one time. Start small, buying only a few ounces. Add more as you're able.
Keep in mind that the goal is not to quickly become wealthy. Instead, the goal here is to build enough wealth to not need to rely upon Social Security benefits.
Gold may not be the most attractive investment, but it could be a great complement to any retirement strategy.
What proportion of your portfolio should you have 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. The most traded precious metal is gold.
There are many other precious metals, such as silver and platinum. While gold's price fluctuates during economic turmoil, it tends to remain relatively stable. It is also not affected by inflation and depression.
As a general rule, the prices for all precious metals tend to increase with the overall market. But they don't always move in tandem with one another. When the economy is in trouble, for example, gold prices tend to rise while other precious metals fall. Investors are more likely to expect lower interest rates making bonds less attractive investments.
Contrary to this, when the economy performs well, the opposite happens. Investors favor safe assets like Treasury Bonds, and less precious metals. Since these are scarce, they become more expensive and decrease in value.
It is important to diversify your portfolio across precious metals in order to maximize your profit from precious metals investments. Because precious metals prices are subject to fluctuations, it is best to invest across multiple precious metal types, rather than focusing on one.
How Does Gold Perform as an Investment?
Gold's price fluctuates depending on the supply and demand. Interest rates can also affect the gold price.
Due to limited supplies, gold prices are subject to volatility. There is also a risk in owning gold, as you must store it somewhere.
How much tax is gold subject to in an IRA
The fair market value at the time of sale is what determines how much tax you pay on gold sales. You don't have tax to pay when you buy or sell gold. It is not considered income. If you sell it later you will have a taxable profit if the price goes down.
Loans can be secured with gold. Lenders seek to get the best return when you borrow against your assets. This often means selling gold. It's not guaranteed that the lender will do it. They might just hold onto it. Or they might decide to resell it themselves. Either way, you lose potential profit.
You should not lend against your gold if it is intended to be used as collateral. If you don't plan to use it as collateral, it is better to let it be.
- 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)
- If you accidentally make an improper transaction, the IRS will disallow it and count it as a withdrawal, so 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)
- Contribution limits$6,000 (49 and under) $7,000 (50 and up)$6,000 (49 and under) $7,000 (50 and up)$58,000 or 25% of your annual compensation (whichever is smaller) (lendedu.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)
- This is a 15% margin that has shown no stable direction of growth but fluctuates seemingly at random. (smartasset.com)
- 7 U.S. Code SS 7 – Designation of boards of trade as contract markets
- 26 U.S. Code SS 408 – Individual retirement accounts
How to Hold Physical Gold in an IRA
The easiest way to invest is to buy shares in companies that make gold. However, there are risks associated with this strategy. It isn't always possible for these companies to survive. Even if the company survives, they still face the risk of losing their investment due to fluctuations in gold's price.
An alternative option would be to buy physical gold itself. This means that you will need to open an account at a bank, bullion seller online, or purchase gold from a trusted seller. These options offer the convenience of easy access, as you don't need stock exchanges to do so. You can also make purchases at lower prices. It's also easy to see how many gold you have. The receipt will show exactly what you paid. You'll also know if taxes were not paid. You also have a lower chance of theft than stocks.
There are also some drawbacks. You won't be able to benefit from investment funds or interest rates offered by banks. Additionally, you won’t be able diversify your holdings. You will remain with the same items you bought. Finally, the taxman may ask you about where you have put your gold.
BullionVault.com offers more information on buying gold for an IRA.
By: Jamie Redman
Title: FTX Customers Express Dissatisfaction with Reimbursement Plan Amidst Objections
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