The recently-dissolved cryptocurrency exchange FTX has disclosed a draft creditor-repayment plan intended to settle its remaining debts, according to Bloomberg, which is the latest move in the case. In addition to suggesting the abolition of its digital token, FTT, the plan calls for paying out client claims in cash.
FTX Mentions Creditor-Repayment Plan, Exchange May Relaunch
In court documents submitted by FTX, it is stated that the planned plan would divide creditors into various claimant classes. A notable feature of the plan is the establishment of a road for a particular class of claimants to potentially resurrect the exchange by cooperation with outside investors, subject to a group agreement.
The plan creates three “recovery pools”: assets associated with FTX.com customers, assets connected to FTX US customers, and assets unrelated to the exchanges. These recovery pools are used to calculate creditor repayments. As anticipated by the corporation, almost all creditor classes will be judged impaired, which means they might not receive full payment.
No Intervention for FTT Tokens
The plan, interestingly, does not provide for recovery for FTT tokens because of their equity-like characteristics. The exchange’s advisors underlined the fact that equity is frequently destroyed in US bankruptcy reorganizations. The SEC has previously identified the FTT token as a security in a complaint brought against Caroline Ellison, the former CEO of Alameda Research, and FTX co-founder Gary Wang.
The idea is still in its early phases and is open to modification, FTX emphasized. FTX Chief Restructuring Officer John J. Ray III pledged in a statement that the business will fulfill the plan on time. In order to present a revised plan in the fourth quarter of this year, the company wants to work with creditors over the coming months. On the other hand, with billings from interim CEO John Ray III stating FTX restart or a 2.0 reboot in May filings, the prospect of an FTX reboot had already been raised.
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