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I'm not sure what your proposed alternative is? If you don't peg the payouts to crypto FMV at the time of the crash, then FTX is still insolvent (because their

• ClarityJones 3y ago
  > nobody gets anything. The argument is that equity should get nothing, and the crypto-holder's assets should be adjusted for current value... just like how cash-holder's recovery would be adjusted for inflation.
  • JumpCrisscross 3y ago
    > how cash-holder's recovery would be adjusted for inflation Is it really?
    • ClarityJones 3y ago
      > A debtor's promise of future payments is worth less than an immediate payment of the same total amount because the creditor cannot use the money right away, inflation may cause the value of the dollar to decline before the debtor pays, and there is always some risk of nonpayment. The challenge for bankruptcy courts reviewing such repayment schemes, therefore, is to choose an interest rate sufficient to compensate the creditor for these concerns. Till v. SCS Credit Corp, 541 US 465, 474 (2004).
      • deleted 3y ago
        [deleted]
      • JumpCrisscross 3y ago
        Post-judgement interest remains at the discretion of the court, and applies "when a creditor has a security interest in an amount greater than his or her claim, that 'oversecured' creditor is entitled to interest on the claim as well as repayment of principal" [1]. Whether the claim is on cash or collateral doesn't seem to have figured into the law. [1] https://bbklaw.com/resources/best-in-law-which-interest-rate-applies-in-bankruptcy https://bbklaw.com/resources/best-in-law-which-interest-rate...