The post Bankrupt Crypto Exchange FTX Announces Global Settlement, Addresses Liquidation Issues In US And Bahamas appeared first on Coinpedia Fintech News

FTX Trading Ltd., a bankrupt crypto exchange, has made a significant announcement by reaching a settlement agreement. This aims to address the legal issues that have arisen from the liquidation proceedings of its subsidiary, FTX Digital Markets Ltd., in The Bahamas.

FTX Settles With Debtors

FTX and its associated debtors collectively reached a global settlement with the Joint Official Liquidators representing FTX Digital Markets Ltd., a subsidiary facing liquidation in The Bahamas. The agreement, subject to the approval of both the U.S. Bankruptcy Court for the District of Delaware and the Supreme Court of The Bahamas, seeks quick court approvals now.

Under the terms of this Global Settlement Agreement, FTX Debtors and FTX Digital Markets will collaborate closely to pool assets and coordinate the establishment of reserves. This will ensure that customers of FTX.com receive equitable distributions, irrespective of the legal proceedings in the U.S. or The Bahamas.

One of the most customer-centric approach of the settlement is the provision allowing FTX.com customers to choose where their claims will be reconciled and paid, either in the Chapter 11 cases of the FTX Debtors in the U.S. or in the liquidation proceedings in The Bahamas. This choice is expected to have no significant economic impact on the claim holders.

The parties expressed that this settlement will solve the cross-border legal challenges posed by the FTX group’s collapse. The valuation of claims, particularly for digital assets, will be consistent in both jurisdictions, calculated in U.S. Dollars as of the petition dates, with no adjustments for post-petition price fluctuations.

John J. Ray III, CEO of FTX Debtors, described the settlement as a key achievement, focusing on resolving challenges and prioritizing FTX.com customers’ interests while respecting all involved jurisdictions.

FTX To End Its Bankruptcy

The collapsed FTX submitted a bankruptcy termination proposal to a Delaware court, as indicated in a Saturday filing. The latest proposal categorizes creditor and customer claims based on their assigned priority by the estate, with the valuation of these claims being determined according to asset prices at the time of the company’s bankruptcy filing. Additionally, the estate released a statement explaining that the plan aims to optimize and effectively distribute value to all creditors.

Similar to other notable crypto bankruptcy cases, this plan is expected to encounter resistance from different creditor groups until it receives court approval. A hearing for the case is scheduled to be set in 2024.

The downfall of FTX towards the end of last year triggered a crypto run amounting to $8 billion, leading to the incarceration of its former CEO, Sam Bankman-Fried.

In a recent trial, Bankman-Fried was convicted on seven charges, including fraud and conspiracy, related to his management of the crypto exchange. He is potentially facing a maximum sentence of 110 years, with his sentencing set for March of the following year.