FTX resolves dispute with Bahamian liquidators By Reuters

© Reuters. FILE PHOTO: An FTX brand and a illustration of cryptocurrencies are seen by damaged glass on this illustration taken December 13, 2022. REUTERS/Dado Ruvic/Illustration/File Photograph

By Dietrich Knauth

(Reuters) -Bankrupt crypto change FTX Buying and selling on Tuesday introduced a settlement with liquidators for FTX’s Bahamas unit, resolving a long-simmering dispute over whether or not the corporate’s U.S. chapter proceedings ought to take priority over the Bahamian liquidation.

FTX and FTX Digital Markets have agreed to pool their belongings and harmonize their method to valuing buyer claims to make sure equal therapy for patrons in both nation’s insolvency course of. The settlement will permit most prospects of FTX.com’s worldwide crypto change to decide on whether or not to hunt compensation from both the U.S. chapter or the Bahamian liquidation, based on FTX.

FTX’s CEO John Ray, who took management of the corporate from convicted FTX founder Sam Bankman-Fried, mentioned that the settlement is a important milestone within the firm’s effort to repay prospects.

“The distinctive challenges raised by the conflicting filings of the FTX Debtors and FTX Digital Markets have been among the hardest the group has confronted,” Ray mentioned in a press release. “However we acknowledged originally that we’ve got an overlapping constituency: FTX.com prospects.”

The Bahamian liquidators, Brian Simms and Peter Greaves, mentioned in a press release that the settlement will keep away from “years of protracted litigation and expense” and “speed up the return of funds to prospects.”

FTX had been at odds with Bahamian officers ever since submitting for chapter safety on Nov. 11, with a gap in its stability sheet that left its 9 million prospects going through billions in potential losses. FTX had sued the Bahamian liquidators in March, looking for a ruling that the liquidators had wrongly claimed possession of the change’s belongings.

Below the settlement, FTX’s U.S. based mostly chapter group will take the lead on asset restoration efforts, together with any potential sale of the FTX.com change or its mental property. The Bahamian liquidators can be accountable for promoting actual property belongings within the Bahamas and pursuing sure litigation claims.

The settlement additionally contains an settlement to FTX’s proprietary crypto token FTT as fairness in FTX, which might be worn out within the firm’s chapter. The worth of FTT tokens had been a degree of rivalry between the 2 sides final 12 months, when FTX’s U.S. group alleged that many of the belongings seized by the Bahamian liquidators had been worthless FTT tokens.

FTX, which collapsed in November 2022, has dedicated to utilizing a minimum of 90% of its belongings to repay prospects. The corporate plans to pay prospects again in U.S. {dollars}, quite than in cryptocurrency.