FTX and Bahamas Liquidators Agree on New Bankruptcy Terms

Bankrupt cryptocurrency exchange FTX has resolved the lingering issue with liquidators on how to treat their Bahamas unit. The bankrupt company recently settled on how to repay customers from their Bahamas unit.

According to reports, FTX and FTX Digital Markets have agreed to work together by pooling their assets and using a unified approach to value customer claims. This will ensure that customers from the United States and the Bahamas receive equal treatment. The agreement would also allow FTX customers to choose whether to seek repayment from the U.S. bankruptcy or the Bahamian liquidators.

FTX’s new CEO, John Ray, confirmed the recent agreement as a significant milestone in the company’s repayment process. He noted that one of the toughest challenges his team has faced is the conflicting filings of the FTX Debtors and FTX Digital Markets. However, he said they realized from the beginning that it was a matter of overlapping constituencies.

On their part, representatives of the Bahamian liquidators, Brian Simms and Peter Greaves, noted that the recent agreement would avoid “years of protracted litigation and expense” and “accelerate the return of funds to customers.”

The agreement ends a long-running feud between FTX and Bahamian officials since the crypto exchange declared bankruptcy on November 11, 2022. FTX sued the Bahamian liquidators last March, alleging that the liquidators wrongly claimed ownership of the exchange’s assets.

Reuters reported that subsequently, FTX’s U.S.-based bankruptcy team would lead the asset recovery process, according to the terms of the agreement. This would also cover any potential sale of the FTX exchange or its intellectual property. On its part, the Bahamian liquidators would be in charge of selling real estate assets in the Bahamas and pursuing certain litigation claims.