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In the latest development, the FTX 2.0 Group has unveiled a draft-creditor repayment plan as part of its bankruptcy restructuring process. The newly revamped exchange is planning for settling customer claims in cash while wiping out its native cryptocurrency FTT token.
FTX 2.0 is planning to amend this plan based on feedback from stakeholders. Thus, it proposes valuing customer claims in USD as of the date of bankruptcy. As per the court papers, the restructuring plan involves FTX 2.0 repaying the creditors by attaching assets tied to different verticals of the business. Furthermore, the filing shows that FTX 2.0 still hasn’t ruled out the rebooting of its offshore exchanges.
Three recovery pools will be used to guide creditor repayments. These pools include assets from FTX.com customers, FTX US customers, and assets not directly connected to the exchanges. The company considers most proposed creditor classes impaired, indicating that it does not expect to fully compensate them.
FTX 2.0 Suggests No Recovery of FTT Tokens
The restructuring plan for FTX 2.0 calls for no recovery of the FTT tokens citing their “equity-like characteristics”. The US bankruptcy reorganization plan usually wipes out the equity component. Commenting on the development, FTX Chief Restructuring Officer John J. Ray III said:
“We are pleased today to deliver on our commitment to file the Plan at this relatively early stage. The company intends to collaborate with creditors in the coming months and file an amended plan in the fourth quarter of this year”.
FTX has mentioned that the plan is still in the early stages and further modification is possible. The proposal also suggests that 7 groups of creditors will have a chance to vote on the plan, including FTX.com customers, FTX US customers, and non-fungible token holders.
Last month in July, FTX 2.0 sued disgraced founder Sam Bankman-Fried and his team to recoup a large part of their questionable transactions. The exchange alleged that the defendants consistently misused funds for luxury condos, political contributions, speculative investments, and personal projects, leading to what the company referred to as “one of the largest financial frauds in history.”
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