FTX proposes a re-boot of its bankrupt exchange for offshore customers
- The rebooted exchange would be available only to offshore customers.
- FTX’s advisors suggested giving no recovery on account of FTT tokens due to their “equity-like characteristics.”
We could see a potential reboot of the bankrupt crypto exchange FTX under a newly proposed plan.
FTX’s bankruptcy administrators submitted a reorganization plan on 31 July that proposes to categorize its creditors into different classes of claimants. The proposal also includes a pathway for one class of claimants to restart the exchange with third-party investors. The rebooted exchange would be available only to offshore customers.
As per the proposal, the group of former FTX.com customers may choose to pool their assets to form what it calls an “offshore exchange company” or a “rebooted” platform. But it will not be available to customers in the U.S.
The proposal classified the claimants into seven different groups. The first group is claimants of FTX.com offshore exchange. The second group is customers of its U.S. unit. Then, there are customers of its NFT exchange. There are general unsecured claims, secured claims, and subordinated claims too.
“Waterfall priorities” will determine the priority of these claims. Once the preceding class is finished, a pro-rata payout will go towards each group of claimants in what is left of the pool. The particular order of payout will be determined following negotiations with stakeholders.
The plan also proposes valuing customer claims in USD as of the date FTX declared bankruptcy. Customers will be repaid by selling assets related to different silos of the venture.
No recovery for those who bought FTT
FTX’s advisors also recommend giving no recovery on account of FTT tokens due to the “equity-like characteristics” of such tokens.
The value of FTT surged 17% to $1.58 following the announcement.
At press time, FTT was trading at $1.41.
A Singapore-based lawyer warned Twitter users to be wary of riding on this price rise as FTT users will get nothing.
Before you guys start aping FTT on the back of the FTX restart news – FTT will be getting nothing in the FTX restart plan.
— wassielawyer （哇西律师） (@wassielawyer) August 1, 2023
In the next few months, the company plans to work with creditors and file a revised plan in the fourth quarter of this year.