FTX has recently reached a settlement agreement with the liquidators of its Bahamian subsidiary, marking a significant development in the ongoing insolvency proceedings.
This arrangement entails the consolidation of assets and the adoption of a unified approach to assess customers’ claims.
In a statement released through PR Newswire, FTX has allowed its customers the option to choose how they wish to recover their funds.
They can either opt for the bankruptcy process in the United States or participate in the liquidation proceedings in the Bahamas.
This flexibility is crucial for the millions of FTX Group customers across 230 jurisdictions worldwide.
Peter Greaves, the Joint Official Liquidator, acknowledged the complexity of the insolvency, stating, “This continues to be an exceptionally complex insolvency with a myriad of jurisdictional, technical, and practical challenges to work through.”
However, the agreement provides a breakthrough in collaboration for asset monetization and customer claims adjudication, expediting the return of funds to customers.
Under the terms of the settlement, FTX’s US-based team will lead efforts to recover assets, which includes any potential sale transactions involving FTX.com exchange or its intellectual property.
Simultaneously, Bahamian liquidators will focus on selling real estate assets in the Bahamas and pursuing specific legal claims.
FTX’s financial troubles began last year when FTX Digital Markets filed for bankruptcy protection in the US. This move came after a turbulent period marked by court proceedings, regulatory scrutiny, and the appointment of provisional liquidators.
The Securities Commission of the Bahamas (SCB) had suspended FTX’s registration and frozen its assets earlier, followed by similar actions from Australian, Japanese, and Cypriot regulators.
Moreover, the SCB had a dispute with FTX’s CEO, John Ray, concerning the handling of $3.5 billion in customers’ funds and the acquisition of digital assets from FTX’s local entity.
Ray contested the SCB’s calculations, while the SCB cited incomplete information.
This dispute also included allegations of the SCB minting $300 million in FTT tokens and accusations of theft related to FTX’s tokens under the SCB’s custody.
FTX’s troubles further escalated with its bankruptcy filing and the subsequent fallout involving over 130 affiliates.
Additionally, a cyberattack led to the theft of millions of cryptocurrencies from the exchange.
In conclusion, the settlement between FTX and its Bahamian liquidators represents a significant step forward in resolving the complex insolvency and facilitating the return of funds to customers across the globe.