Cryptocurrencies

A significant claim has been transferred against FTX EU – formerly known as K-DNA Financial Services

A large claim against FTX EU – formerly known as K-DNA Financial Services – has been transferred to FTXcreditor in the latest development in the FTX bankruptcy case. This transfer would speed up all further procedures but also pose risks for small creditors.

According to documents filed in the U.S. Bankruptcy Court for the District of Delaware on May 15, the claim is part of an ongoing Chapter 11 proceeding that was previously held against FTX EU.

The transfer was made under the rules required by the Federal Rules of Bankruptcy Procedure, specifically Rule 3001(e)(2), which addresses transfers of claims:

“Seller hereby waives any notice or hearing requirements imposed by Rule 3001 of the Federal Rules of Bankruptcy Procedure, and stipulates that an order may be entered recognizing such evidence of transfer of claim as an unconditional assignment and Buyer as the rightful owner of the claim. “

This step is a strategic attempt to simplify the administrative processes of the bankruptcy case by consolidating all claims under one creditor.

Although this may accelerate the case towards its conclusion, it poses a risk to small creditors. Given the single entry point for claims through the company, smaller creditors can be overwhelmed in favor of larger creditors – receiving fewer or less favorable terms.

The new individual claimant, FTXcreditor, is represented by Michael Boettger; However, the identity of the carrier remains confidential at this time.

“To protect the identity of the transferor, the transferee has not disclosed the name or address of the transferor, nor has signed proof of transfer attached to this Notice of Transfer of Claim.”

The lack of transparency could raise questions about how the bankruptcy process will be handled amid this consolidation process – exposing the risks of manipulation as claims transfer identities remain shrouded in anonymity.

Related: Post-FTX Cryptocurrency Industry Needs Education Before Regulation: Former Biden Advisor

After filing for bankruptcy in November 2022, cryptocurrency exchange FTX faced a sudden financial downturn, which had lasting consequences for all affected creditors.

Since then, regulation – particularly in the United States – has focused on cryptocurrencies in an attempt to assert greater controls and ensure investor safety.

This latest development in the case comes on the heels of a recent development from FTX co-founder Sam Bankman-Fried, who maintained his innocence after being sentenced to 25 years in prison.

In an interview on May 9, Bankman-Fried described his experience, explaining that he was living on beans and rice – the latter becoming what he called “one of the kingdom’s currencies at home.”

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