Global Settlement Agreement between FTX Debtors and Bahamian Subsidiary to Settle Bankruptcy

• Agreement between FTX debtors and FTX Digital Markets seeks to simplify bankruptcy and improve customer recovery.

• FTX Digital Markets will lead real estate liquidation in the Bahamas, maximizing returns from asset management.

In a hopeful turn of events for those affected by the collapse of the FTX Group, a key agreement has been announced between the debtors of FTX and its Bahamian subsidiary, FTX Digital Markets. This pact, which still requires the approval of the U.S. Bankruptcy Court for the District of Delaware and the Supreme Court of the Bahamas, promises to significantly simplify bankruptcy proceedings and improve the prospects of recovery for customers.

Coordinated Strategy between FTX and FTX Digital Markets

This agreement is a collaboration between FTX Debtors and FTX Digital Markets for joint asset management. They seek to synchronize the creation of reserves and define the timing and amounts of fund distributions in an effort to streamline the process for FTX.com customers who file claims. These customers face the additional decision of determining which entity to file their claims against, which adds a layer of complexity to the process.

FTX Digital Markets will adjust its know-your-customer (KYC) procedures to align with standards in the U.S., the Bahamas and other relevant jurisdictions. This step ensures compliance with various legal regulations and reflects a commitment to regulatory adherence amidst the ongoing bankruptcy process.

FTX’s Bahamian Real Estate Liquidation

An important point of the agreement is that FTX Digital Markets will lead the liquidation of FTX’s Bahamian real estate assets. This move is a key part of the overall asset management strategy to maximize returns from these properties.

John J. Ray III, CEO and chief restructuring officer of FTX, has acknowledged the complexity of the situation. Ray notes the challenges in resolving conflicts between FTX and FTX Digital Markets’ debtor filings and views this agreement as a crucial milestone in navigating these difficulties.

Unitholder Exclusions and Recoveries

Importantly, according to the release, interests against the FTX Debtors and FTX Digital Markets, held by FTT, will be treated as equity. Therefore, these holdings will not be eligible for recovery, setting clear boundaries for stakeholders in this complex bankruptcy case.

The agreement between the FTX debtors and their Bahamian subsidiary marks a step forward in addressing the legal and financial challenges that arose following the collapse of the FTX group. This coordinated approach across jurisdictions reflects a strategic effort to streamline the bankruptcy process, ensuring compliance and maximizing the distribution of assets to affected clients.