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(Kitco News) -
The new management team of bankrupt cryptocurrency exchange FTX are continuing to hold out hope for a reboot of FTX.com, and creditors could opt for equity in the relaunched exchange, according to the latest court filings.
FTX’s new management filed a number of documents with the Delaware bankruptcy court on July 31. Among them was a draft reorganization plan that lists “a restart of an offshore exchange” among the possibilities.
The bulk of the reorganization plan focuses on various ways to settle what the company refers to as an “exceptionally large and complicated collection of claims.”
According to the filings, there are 13 different classes of claims, including specific brackets for FTX.com customer entitlements, U.S. customer claims and nonfungible token (NFTs) claims.
The proposed global settlement intends to value all claims in U.S. dollars, regardless of whether the assets were held on the FTX.com or FTX US platforms. The valuations would be based on a methodology prepared by FTX which has not yet received the approival of the bakruptcy court.
FTX plans to divide the claims into three main recovery pools: Those of FTX.com customers, FTX US customers, and assets that do not fit into the other two categories.
Users that held NFTs on FTX exchanges will have their own separate classification, as the company intends to return them to their rightful owners unless the tokens were destroyed or lost.
The filings also recognize a special category of “shortfall” claims by FTX.com and FTX US against the third pool of assets, which are intended to compensate creditors for the alleged misappropriation of assets by former CEO Sam Bankman-Fried and his inner circle.
The filings also show that the company plans the “extinguishment of FTT claims,” which implies that holders of the former exchange’s own tokens will not be compensated at all.
FTT spiked from $1.35 to $1.60 in the immediate wake of the filing on Monday evening, but the token’s price has fallen steadily since, and was trading at $1.37 at the time of writing.
The plan concludes with a secion outlining the company’s intention to ultimately liquidate the estates of FTX and pay distributions to customers and creditors in U.S. dollars.
The section also says that customers may be offered stakes in “a restart of an offshore exchange” if they so choose. This means that if the FTX.com reboot were to happen, creditors could opt for a share of the equity, tokens and other interests in the relaunched exchange.
On June 28, the Wall Street Journal reported that new CEO John Ray was moving ahead with efforts to revive the international exchange. According to Ray, the company “has begun the process of soliciting interested parties to the reboot of the FTX.com exchange.”
On April 18, reports emerged that venture capital firm Tribe Capital, which invested in FTX.com prior to its collapse, was considering rebooting the bankrupt crypto exchange.
In January, Tribe co-founder Arjun Sethi met with the committee representing FTX’s unsecured creditors “to discuss the informal proposal, according to people familiar with the matter” who are involved in the talks but asked not to be identified.
Tribe was considering raising $250 million for the new initiative, including $100 million from its own funds and those of limited partners. The venture firm, which has over $1.6 billion in AUM, invested in the first iterations of both FTX and FTX US, and also backed the Kraken crypto exchange.
Shortly after the story broke, FTX’s committee of unsecured creditors posted a series of tweets addressing the possible reboot. “The Committee is working with the Debtors to evaluate all options to reboot or sell the FTX exchanges and create value for creditors,” they wrote. “There is no definitive timetable for a reboot or sale of the exchanges at this time.”
FTX and all of its subsidiaries, along with sister hedge fund Alameda Research, filed for bankruptcy on Nov. 11, 2023. The former founder and CEO, Sam Bankman Fried, faces a criminal trial for his role in the bankruptcy scheduled to begin on October 2, 2023.
