- FTX proposes creditor categorization for revival with external investors.
- Priority of claims is determined by the “waterfall priorities” system.
- FTX customers express disappointment and seek their own plans if ignored.
The catalyst of crypto winter is once again making active attempts to re-enter the world of crypto. The now-defunct crypto exchange, FTX, has put forth a proposal to categorize its creditors into distinct groups based on their claims. Additionally, the exchange has outlined a potential route for one of these groups to revitalize FTX by collaborating with external investors, provided that the group reaches a consensus on the matter.
The filing, published on Monday night U.S. time, categorizes the claimants into several distinct groups. The initial group consists of claimants associated with FTX.com offshore exchange, referred to as “dotcom customers.” Following this, there are customers of the U.S. exchange, termed “U.S. customers,” and then customers of its NFT exchange. The subsequent groups include general unsecured claims, secured claims, and subordinated claims. Within the general claims category, one can find claims from Alameda’s lenders or trading partners, while subordinated claims encompass taxes and penalties fines.
The priority of these claims will be established based on the “waterfall priorities” system, where each class will receive a proportional payout from what remains in the pool after the previous class is settled. The exact sequence of payout will be determined through discussions and negotiations with the relevant stakeholders.
Individuals within the Dotcom claimants category, who were previously customers of FTX.com, have the option to combine their assets and form what is referred to as an “offshore exchange company” or a “rebooted” platform that would not be accessible in the United States. This alternative allows them to explore the possibility of restarting their trading activities on a platform independent of U.S. jurisdiction. Moreover, the document proposes the possibility that the debtors could choose to waive receiving a cash payout in favor of obtaining a stake in the new exchange being formed:
Rather than all cash, the Debtors may determine that the Offshore Exchange Company remit non-cash consideration to the Dotcom Customer Pool in the form of equity securities, tokens or other interests in the Offshore Exchange Company, or rights to invest in such equity securities, tokens or other interests.
Previously, there have been indications of potential FTX reboots, as indicated by invoices from interim CEO John Ray III in May mentioning “FTX restart” or a “2.0 reboot.” However, Singapore-based Wassielawyer, known as an anthropomorphic penguin-crypto Twitter legal personality, pointed out that the proposed restructuring plan does not account for FTT holders.
In a recent development, A body representing FTX customers has expressed “extreme disappointment” regarding the exchange’s draft bankruptcy exit plan, claiming that FTX’s restructuring team disregarded its input. According to a court filing on July 31, FTX’s Official Committee of Unsecured Creditors (UCC) stated that despite making repeated requests and receiving assurances from the team, they were not given any opportunity for a call or meeting to discuss their draft Chapter 11 plan.
