Disgraced crypto exchange FTX is making efforts to reboot its operations after facing bankruptcy. In a draft plan filed on July 31st, FTX proposed a reorganization strategy that involves categorizing its creditors into different classes and offering a potential route for one of these classes to revive the defunct exchange with the help of third-party investors. However, this proposal requires a consensus among the group.
Under the plan, FTX.com offshore exchange users will be classified as “dot-com customers,” while FTX.US clients will be referred to as “US customers.” Each holder of an allowed Dotcom Customer Entitlement or US Customer Entitlement will receive a pro-rata share of the respective customer pool. Additionally, the Debtors may choose to provide non-cash consideration to the Dotcom Customer Pool in the form of equity securities, tokens, or other interests.
The draft plan aims to achieve a “global settlement” and a “good-faith compromise” regarding the various claims, legal causes, and conflicts involving the Debtors. One notable point is the cancellation of FTT holders’ claim in terms of distribution. This move has raised concerns among lawmakers and the crypto community, given FTX’s tarnished reputation and the ongoing challenge of compensating creditors.
This development follows FTX’s recent in-principle agreement with bankrupt crypto company Genesis after months of disputes over funds. Following the announcement, FTX’s native token, FTT, experienced a 10% surge to a two-week high. Although it retraced slightly, FTT trading volumes have significantly increased since then.
The proposed FTX reboot and its potential impact on creditors and the crypto community will undoubtedly be closely monitored. As the exchange seeks to regain trust and address its financial obligations, the outcome of the reorganization efforts will have significant implications for the future of FTX.
Disclaimer: This article is for informational purposes only and should not be construed as financial advice.