FTX Resolves Dispute with Bahamian Liquidators
FTX Trading Announces Settlement with Bahamian Liquidators
Bankrupt crypto exchange FTX Trading has reached a settlement with liquidators for FTX’s Bahamas unit, resolving a long-standing dispute over the precedence of the company’s U.S. bankruptcy proceedings over the Bahamian liquidation.
Equal Treatment for Customers in Insolvency Process
FTX and FTX Digital Markets have agreed to pool their assets and harmonize their approach to valuing customer claims to ensure equal treatment for customers in either country’s insolvency process. The settlement will allow most customers of FTX.com’s international crypto exchange to choose whether to seek repayment from either the U.S. bankruptcy or the Bahamian liquidation, according to FTX.
Critical Milestone in Repaying Customers
FTX’s CEO John Ray, who took control of the company from convicted FTX founder Sam Bankman-Fried, said that the agreement is a critical milestone in the company’s effort to repay customers. Ray stated that “The unique challenges raised by the conflicting filings of the FTX Debtors and FTX Digital Markets have been some of the toughest the team has faced. But we recognized at the beginning that we have an overlapping constituency: FTX.com customers.”
Accelerated Return of Funds to Customers
The Bahamian liquidators, Brian Simms and Peter Greaves, said in a statement that the agreement will avoid “years of protracted litigation and expense” and “accelerate the return of funds to customers.”
Asset Recovery Efforts and Plan to Repay Customers
Under the agreement, FTX’s U.S. based bankruptcy team will take the lead on asset recovery efforts, including any potential sale of the FTX.com exchange or its intellectual property. The Bahamian liquidators will be in charge of selling real estate assets in the Bahamas and pursuing certain litigation claims. FTX, which collapsed in November 2022, has committed to using at least 90% of its assets to repay customers. The company plans to pay customers back in U.S. dollars, rather than in cryptocurrency.
