Affiliated Debtors of FTX Reach Global Settlement with Bahamian Subsidiary
Affiliated debtors of FTX, the crypto exchange that filed for bankruptcy protection in the U.S. last November, announced on Tuesday that they have reached a global settlement with FTX Digital Markets, the Bahamian subsidiary that was undergoing a separate liquidation process.
The agreement is a “a novel and mutually-beneficial solution to the complex cross-border legal issues raised by the circumstances of the collapse of the FTX group,” according to a statement from the debtors. However, it is still subject to approval from the U.S. Bankruptcy Court for the District of Delaware and the Supreme Court of the Bahamas Court.
Under the settlement, FTX debtors and FTX Digital Markets will pool their assets and coordinate distributions to FTX.com customers. Customers will need to choose which entity to file their claim against. Additionally, the Bahamian subsidiary will implement know-your-customer procedures to ensure compliance with applicable laws in various jurisdictions.
Real Estate Holdings
FTX Digital Markets will take charge of liquidating FTX’s real estate holdings.
“The Global Settlement Agreement is another critical milestone for the FTX Debtors,” said John J. Ray III, CEO and chief restructuring officer of FTX. He acknowledged that the conflicting filings between FTX Debtors and FTX Digital Markets presented unique challenges for the team.
According to the statement, FTT interests held against the FTX debtors and FTX Digital Markets will be treated as equity and will not receive any recovery.
Hot Take: A Resolution for Complex Legal Issues
The global settlement between affiliated debtors of FTX and its Bahamian subsidiary, FTX Digital Markets, offers a unique and mutually beneficial solution to the legal challenges arising from the collapse of the FTX group. The agreement, subject to court approvals, involves pooling assets and coordinating distributions to FTX.com customers. Customers will have to decide which entity to file their claims against. The settlement also ensures compliance with applicable laws in various jurisdictions through standardized know-your-customer procedures. FTX Digital Markets will handle the liquidation of FTX’s real estate holdings. This agreement marks a significant milestone for the FTX Debtors and demonstrates their commitment to resolving complex cross-border issues.
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