- FTX introduced a novel draft creditor-repayment plan to settle its customer claims in cash.
- The platform also proposed to restart FTX.com for offshore customers.
- The plans are at their initial stage and the company has asked for votes and opinions from customers.
In a crucial turn of events, FTX, Sam Bankman-Fried’s crypto exchange, which filed for bankruptcy in November 2022, recently announced the launch of a draft creditor-repayment plan in an effort to settle its customer claims in cash. In addition, the platform has also proposed to restart FTX.com, availing the company’s services for international customers.
According to a Bloomberg report, the defunct crypto exchange has taken initiatives to settle customer complaints as part of its bankruptcy. Last year, FTX filed for Chapter 11 bankruptcy protection in the US Court while the company found itself on the verge of collapse. However, it was found that the US federal prosecutors had been probing into the activities of the platform months before its collapse.
The novel strategy adopted by FTX intends to sell its native token FTT, and thereby use the fund to reimburse the customer debts. As per the report, the recovery pools that guide the repayment scheme include assets linked to the customers of FTX.com and FTX US, as well as assets not completely tied to the customers.
John J. Ray III, Chief Restructuring Officer at FTX emphasized that the plan is in its initial stage and invited seven classes of creditors to vote, depending on which amended plan would be introduced later. He stated, “We are pleased today to deliver on our commitment to file the plan at this relatively early stage”.
FTX’s categorization of its creditors into various classes of claimants is intended to facilitate one class to restart the exchange with third-party investors. While the first and second classes included the customers of FTX.com (dotcom customers) and FTX US respectively, the other parties included the customers of its NFT exchange, unsecured claims, secured claims, and subordinated claims.
While the reimbursement plan focuses on selling FTT tokens, the class structuring offers nothing to the FTT holders. The report reiterated that the creditor repayment plan “provides an initial construct for a global settlement and good-faith compromise of an exceptionally large and complicated collection of claims”.
Disclaimer: The information presented in this article is for informational and educational purposes only. The article does not constitute financial advice or advice of any kind. Coin Edition is not responsible for any losses incurred as a result of the utilization of content, products, or services mentioned. Readers are advised to exercise caution before taking any action related to the company.
