FTX Trading, a bankrupt cryptocurrency exchange, announced on Tuesday a settlement with the liquidators of its Bahamas division, putting an end to a long-standing dispute over the precedence of its U.S. bankruptcy proceedings over its Bahamas liquidation.
FTX and FTX Digital Market have agreed to combine their assets and align their approach to evaluating customer claims to ensure equal treatment of customers in both countries’ bankruptcy processes.
According to FTX, the settlement will allow most customers of FTX.com’s international cryptocurrency exchange to choose whether to seek repayment through U.S. bankruptcy or Bahamian liquidation.
FTX CEO John Ray, who succeeded convicted FTX founder Sam Bankman Fried, stated that the agreement was a significant step in the company’s efforts to reimburse its customers and an important milestone.
“The unique challenges posed by the conflicting filings of FTX Debtor and FTX Digital Market were among the most difficult our team has ever faced,” Ray said in a statement. “However, we initially recognized that we had an overlapping constituency of FTX.com customers.”
Bahamas liquidators Brian Sims and Peter Greaves said in a statement that the agreement would avoid “years of protracted litigation and expense” and “accelerate the return of funds to customers.” Ta.
FTX has been in a dispute with Bahamian authorities since filing for bankruptcy protection on November 11, leaving a hole in its balance sheet and 9 million customers facing potential losses of billions of dollars. FTX sued Bahamian liquidators in March, seeking a judgment that the liquidators wrongly claimed ownership of exchange assets.
Under the agreement, FTX’s U.S.-based bankruptcy team will lead asset recovery efforts, including the potential sale of the FTX.com exchange or its intellectual property. A Bahamian liquidator is responsible for the sale of Bahamian real estate assets and the pursuit of certain litigation.
The settlement also includes an agreement to treat FTX’s proprietary cryptographic token, FTT, as stock in FTX, which would disappear in the event of FTX’s bankruptcy. The value of FTT tokens was a point of contention between the two sides last year when FTX’s US team claimed that most of the assets seized by liquidators in the Bahamas were worthless FTT tokens.
FTX, which went bankrupt in November 2022, promised to use Repay at least 90% of your assets to your customers. The company plans to repay customers in US dollars rather than cryptocurrencies.
Source: nypost.com
