FTX revises bankruptcy court motion to expedite crypto claim settlements FTX revises bankruptcy court motion to expedite crypto claim settlements
FTX modifies course to appease stakeholders in bankruptcy proceedings with new $7m small claims cap.
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Updated: Aug. 21, 2023 at 2:32 pm UTC
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FTX Trading Ltd. has filed a revised motion seeking bankruptcy court approval of streamlined procedures to settle small claims against the bankrupt cryptocurrency exchange.
In the filing with the U.S. Bankruptcy Court in Delaware, FTX asked Judge John Dorsey to authorize the company to settle claims up to $7 million without needing his approval of each settlement. FTX said the procedures are necessary to efficiently resolve the “myriad” of potential claims against the estate.
FTX’s original motion asked to settle claims up to $10 million but was met with opposition from the U.S. Trustee, who argued the amount was too high and lacked creditor oversight.
In the revised motion, FTX lowered the claim amount cap to $7 million to address these concerns. The company also agreed to provide notice of any proposed settlements to the unsecured creditors’ committee and the U.S. Trustee. Additionally, FTX said it would file monthly reports on any payments made.
FTX stated that streamlined settlement procedures are standard in complex bankruptcy cases to avoid litigation costs and lengthy court delays in resolving individual claims. FTX has identified thousands of potential claims related to real estate purchases, investments, donations, and more that may need to be settled.
The unsecured and ad hoc creditors’ committees supported the revised settlement procedures, while the U.S. Trustee was the sole objector.
FTX argued that the new procedures provide adequate safeguards for creditors through oversight while allowing efficient claims resolution. The company asked Judge Dorsey to approve the order authorizing settlements of up to $7 million without individual court approval.
The fate of the settlement procedures motion rests with Judge Dorsey, who will decide whether to grant FTX’s request following a court hearing.
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Also known as "Akiba," Liam is a reporter, editor and podcast producer at CryptoSlate. He believes that decentralized technology has the potential to make widespread positive change.
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FTX is a cryptocurrency derivatives exchange that offers futures, leveraged tokens and OTC trading.
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.
FTX US Derivatives
FTX US Derivatives is a digital currency futures and options exchange and clearinghouse regulated by the US Commodity Futures Trading Commission (CFTC).