FTX debtors and Bahamas liquidators settle on asset recovery strategy FTX debtors and Bahamas liquidators settle on asset recovery strategy
Both halves of FTX have agreed on a plan to maximize stakeholder recoveries.
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Updated: Jan. 7, 2023 at 12:33 am UTC
Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.
The two halves of FTX — its debtors in the U.S. and its liquidators in the Bahamas — have agreed on an asset recovery plan according to a Jan. 6 press release.
John J. Ray III, FTX’s CEO and Chief Restructuring Officer, said that although discussions will continue, many issues have been settled. He stated:
“We would like to thank all of the Joint Provisional Liquidators of FTX DM… There are some issues where we do not yet have a meeting of the minds, but we resolved many of the outstanding matters and have a path forward to resolve the rest.”
The full press release indicates that the two parties will cooperate on various efforts. The parties will share information, arrange the return of property, and file litigation against other parties. The two will also attempt to maximize stakeholder recoveries — presumably meaning that former FTX customers will be made whole.
Specifically, the parties have settled on inventorying crypto assets that securities regulators in the Bahamas currently hold in a Fireblocks wallet.
Both parties are reportedly satisfied by the Bahamas Securities Commission’s safeguarding of those assets. The matter has been publicly disputed since Dec. 29, when the Bahamas Securities Commission admitted to holding $3.5 billion of crypto. FTX also claimed that regulators seized $300 million without any right to do so.
The two parties have also agreed to the disposition of real estate in the Bahamas. It is unclear whether this part of the agreement concerns FTX’s business offices or extends to the controversial condominiums that FTX executives lived in.
The agreement awaits approval in two jurisdictions: the U.S. Bankruptcy Court in Delaware, which is handling FTX Trading Ltd.’s bankruptcy proceedings, and the Supreme Court of The Bahamas, which is handling FTX Digital Markets’ liquidation.
Elsewhere, in the Southern District of New York, criminal proceedings are underway against former FTX CEO Sam Bankman-Fried and his associates.
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Mike Dalton
Before transitioning to crypto writing in 2018, Mike studied library and information sciences. Currently, he resides on Canada's West Coast.
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FTX
FTX is a defunct cryptocurrency exchange, currently in bankruptcy proceedings, that was founded by Sam Bankman-Fried and Zixiao “Gary” Wang in May 2019.
Sam Bankman-Fried is the former CEO, and co-founder of defunct crypto exchange FTX and Alameda Research.
John J Ray III is the Chief Restructuring Officer and now-appointed CEO of FTX, a cryptocurrency derivatives exchange.