FTX Debtors Reach Global Settlement with Bahamian Subsidiary

Kelvin Munene Murithi
December 19, 2023
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FTX debtors and their Bahamian subsidiary, FTX Digital Markets, have reached an agreement to align their bankruptcy proceedings. This move addresses the intricate legal challenges stemming from the FTX group’s collapse. The settlement requires approval from the U.S. Bankruptcy Court for the District of Delaware and the Supreme Court of the Bahamas.

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FTX debtors and FTX Digital Markets Strategy

Under this agreement, FTX debtors and FTX Digital Markets will collaborate in pooling assets. They plan to synchronize the establishment of reserves and determine the timing and amounts for distributing funds. This strategy is designed to streamline the process for FTX.com customers filing claims. These customers must decide which entity to lodge their claims against, adding a layer of decision-making to the process.

Furthermore, FTX Digital Markets will align its know-your-customer (KYC) procedures with those of the U.S., the Bahamas, and other relevant jurisdictions. This step ensures compliance with various legal standards, reflecting a commitment to regulatory adherence amidst the ongoing bankruptcy proceedings.

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Liquidation of Bahamian Real Estate Holdings

Another significant aspect of this agreement is FTX Digital Markets taking the lead in liquidating FTX’s real estate in the Bahamas. This action is a crucial part of the overall asset management strategy to maximize returns from these holdings.

Moreover, John J. Ray III, CEO and chief restructuring officer of FTX, acknowledges the situation’s complexity. He notes the challenges in resolving conflicts between the filings of FTX debtors and FTX Digital Markets. In addition, Ray sees this agreement as a critical milestone in navigating these difficulties.

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Equity Holders and Recovery Exclusions

In clarification, the statement specifies that interests against FTX debtors and FTX Digital Markets held by FTT will be treated as equity. Consequently, these holdings will not be eligible for recovery, outlining clear boundaries for stakeholders in this complex bankruptcy case.

The agreement between FTX debtors and their Bahamian subsidiary marks a significant step in addressing the multifaceted legal and financial challenges following the collapse of the FTX group. This coordinated approach across jurisdictions reflects a strategic effort to streamline the bankruptcy process, ensuring compliance and maximizing asset distribution for affected customers.

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Investment disclaimer: The content reflects the author’s personal views and current market conditions. Please conduct your own research before investing in cryptocurrencies, as neither the author nor the publication is responsible for any financial losses.
Ad Disclosure: This site may feature sponsored content and affiliate links. All advertisements are clearly labeled, and ad partners have no influence over our editorial content.

Why Trust CoinGape

CoinGape has covered the cryptocurrency industry since 2017, aiming to provide informative insights Read more…to our readers. Our journal analysts bring years of experience in market analysis and blockchain technology to ensure factual accuracy and balanced reporting. By following our Editorial Policy, our writers verify every source, fact-check each story, rely on reputable sources, and attribute quotes and media correctly. We also follow a rigorous Review Methodology when evaluating exchanges and tools. From emerging blockchain projects and coin launches to industry events and technical developments, we cover all facets of the digital asset space with unwavering commitment to timely, relevant information.

About Author
About Author
Kelvin Munene is a crypto and finance journalist with over 5 years of experience, offering in-depth market analysis and expert commentary . With a Bachelor's degree in Journalism and Actuarial Science from Mount Kenya University, Kelvin is known for his meticulous research and strong writing skills, particularly in cryptocurrency, blockchain, and financial markets. His work has been featured across top industry publications such as Coingape, Cryptobasic, MetaNews, Cryptotimes, Coinedition, TheCoinrepublic, Cryptotale, and Analytics Insight among others, where he consistently provides timely updates and insightful content. Kelvin’s focus lies in uncovering emerging trends in the crypto space, delivering factual and data-driven analyses that help readers make informed decisions. His expertise extends across market cycles, technological innovations, and regulatory shifts that shape the crypto landscape. Beyond his professional achievements, Kelvin has a passion for chess, traveling, and exploring new adventures.
Investment disclaimer: The content reflects the author’s personal views and current market conditions. Please conduct your own research before investing in cryptocurrencies, as neither the author nor the publication is responsible for any financial losses.
Ad Disclosure: This site may feature sponsored content and affiliate links. All advertisements are clearly labeled, and ad partners have no influence over our editorial content.