FTX, the bankrupt exchange, has released its comprehensive restructuring plan, indicating a potential comeback as an offshore exchange. The plan aims to categorize claimants into specific classes. Additionally, it will lay the groundwork for the exchange to operate as an offshore entity.
Dockets filed on July 31 provide insight into FTX’s proposed reorganization plan, designed to resolve a complex array of claims. With a total of 13 different classes of claims, FTX will address specific categories such as FTX.com customer entitlement claims, U.S. customer claims, and non-fungible token (NFT) customer claims.
Valuation of Claims and Recovery Pools
The global settlement process will entail the valuation of claims in U.S. dollars. This is following a methodology prepared by FTX, pending approval from the bankruptcy court. It will also include resolving disputes over assets held on both FTX.com and FTX US exchanges.
Additionally, FTX plans to identify three primary recovery pools associated with segregated assets attributable to FTX.com customers, FTX US customers, and other non-attributable assets.
Users holding NFTs will receive a separate classification, with the intention of returning NFTs to applicable customers. However, if NFTs were “destroyed” or lost, their claims would be shifted to Class 4A or 4B, as outlined in the filing.
Addressing Unauthorized Borrowing and Misappropriation
The document also acknowledges special “shortfall” claims by the two FTX exchange organizations against a pool of general assets. This move aims to “compensate” the exchanges for the unauthorized misappropriation of assets, allegedly carried out by former CEO.
FTX’s filing hints at the cancellation of intercompany claims, including the “extinguishment of FTT claims.” This indicates that holders of FTX Tokens may not receive compensation for their token holdings, with the collapse in the value of FTT playing a significant role in the exchange’s downfall.
Liquidation, Voluntary Elections and Legal Actions
Notably, the proposed plan concludes with an intention to liquidate the estates of FTX and provide distributions to customers and creditors in cash. Notably, customers may be offered voluntary elections in connection with a potential restart of an offshore FTX exchange. This option would enable specific creditors to opt for a share of equity, tokens, and other interests in the revived exchange.
In the midst of bankruptcy proceedings, FTX has pursued legal action against former executives. These include CEO Sam Bankman-Fried and others, seeking to recover over $1 billion in alleged misappropriated funds.
The July 20 complaint names Bankman-Fried, former Alameda Research CEO Caroline Ellison, FTX co-founder Zixiao “Gary” Wang, and former FTX engineering director Nishad Singh as defendants.
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