FTX customers are strongly opposing the exchange's proposed bankruptcy plan, claiming that it violates their property rights and sells their assets to pay off third-party creditors, including the US government. The FTX Customers Ad Hoc Committee, a group formed to represent the interests of FTX customers, argues that the plan is unfair and that customers should be given back their cryptocurrency instead of a cash balance.

In a recent conversation with Cointelegraph, committee board member Sunil Kavuri emphasized that FTX customers never gave the exchange the title to their cryptocurrency. Therefore, the funds remain their property, and FTX is obligated to return them. Kavuri also criticized the plan for selling customer assets to pay back unsecured creditors, including the US government, and for using customer funds to pay back Alameda lenders such as Genesis and Binance.

The plan, which was proposed on December 16, 2023, claims that nearly all customers will receive their money back, plus interest, if approved. However, Kavuri denied that customers would be made whole under the plan, stating that the exchange does not have a legal basis to pay back customers using cash and must return their property, the cryptocurrency itself, rather than selling the crypto at a profit and keeping some of the profits for itself or third parties.

On June 5, Kavuri and other customers filed a motion to stop the bankruptcy plan from being offered up for a vote. The motion argues that the plan assumes customers’ cryptocurrency belongs to the FTX estate and ignores whether the assets the Debtors seek to distribute through the Plan are actually property of the Debtors’ estates.

The FTX estate has filed a proposed order to approve the disclosure statement for the bankruptcy plan, which is scheduled for a hearing on June 25. If the plan is allowed to go forward, the deadline for voting in favor or against it will be August 16 at 8:00 pm UTC.

Some FTX customers have expressed support for the plan, arguing that it will allow customers to receive at least some of their funds back quickly. However, others, like Kavuri, believe that the plan is unfair and that customers should be given back their cryptocurrency instead of a cash balance.

The FTX bankruptcy case is also being fought over other issues, including a lawsuit against the firm’s legal representatives, Sullivan & Cromwell, alleging it profited from the exchange’s fraud. Additionally, the Customer Ad-Hoc Committee and the estate are fighting over assets seized by former CEO Sam Bankman-Fried during his criminal trial. The closure of FTX was one of the most spectacular crypto exchange collapses in history, with an estimated $8 billion in cryptocurrency lost when the exchange stopped processing withdrawals.