FTX and Bahamas Subsidiary Reach Settlement to Streamline Asset Distribution

By: Eva Baxter

FTX Trading Ltd. and its Bahamas-based subsidiary, FTX Digital Markets, have reportedly settled their ongoing dispute, an announcement made on Dec. 19 confirmed. This move represents a significant stride in handling the issues emerging from the collapse of the FTX group back in November 2022. Crucially, the agreement needs approval from the U.S. Bankruptcy Court for the District of Delaware and the Supreme Court of The Bahamas.

Per the agreement, all FTX users, excepting those with outstanding claims, will be repaid in U.S. dollars for losses incurred in either cash or digital assets. Notably, any NFTs (Non-Fungible Tokens) are excluded from this. Any interest related to the FTT token held against FTX Debtors and FTX Digital Markets will be counted as equity, thus not being part of the recovery process.

FTX.com clients will be allowed to vote on claim reimbursement preference by Q2 2024. Options include either proceeding via U.S. or Bahamas jurisdiction. John J. Ray III, the current CEO of FTX, hailed this settlement as a major milestone that attends to customers' interests whilst addressing the intricate legal hurdles posed by contradictory filings of FTX Debtors and FTX Digital Markets.

Previous CEO, Sam Bankman-Fried, was found guilty of multiple felony counts related to fund misuse between FTX and Alameda Research as of the previous year. His sentencing is due in March 2024. The FTX debtors have been selling off company assets to repay creditors amidst the ongoing bankruptcy proceedings.