The FTX creditors’ described the plan for the platform’s restructuring proposed by management as ‘ideas’, noting the absence of formal negotiations for its discussion.
The plan presented on July 31 envisages a relaunch of the offshore exchange with access for users outside the United States.
The firm intends to separate ‘dot-com clients’ from the rest. According to the document, they will receive a ‘proportional share of the revenues from the asset pool linked to FTX.com’.
The firm also plans to establish a separate entity to oversee the relaunch of the offshore exchange, which will not be accessible in the United States.
The creditors’ representatives stressed that FTX’s lawyers must put more effort into engagement. They were ‘disappointed’ by the absence of discussion of the ‘restart plan’.
Emerging disagreements could delay the restructuring plans, as creditors will have the right to vote on the final path for the group of companies’ development. The committee stressed that any official plan must transfer control of FTX into the hands of ‘qualified third parties’ chosen by its representatives.
Lawyers said there is a need to create a token that complies with regulatory requirements for restoration and relaunch of the platform. They threatened to sue if their position is not taken into account.
So far this has been avoided, though ‘FTX management is not doing enough to maximise restitution to customers’, the committee noted.
In particular, the claims touched on the lack of investment of at $8.7 billion in U.S. Treasury securities, which could offset high consultant fees.
Lawyers have also provided a ‘plan’ to maximise the remaining crypto assets of FTX and its various subsidiaries. It includes taking control, hedging, and selling the ‘vast stockpiles of coins’ held by the entities.
The creditors’ committee criticised the FTX leadership for not having proposed a plan to monetise the investments of the remaining cryptocurrencies until recently.
The group also called proposals to sell certain venture assets belonging to bankrupt companies ‘suspicious’. Additionally, the committee criticised spending more than $330 million on paying for professional services.
In January 2023, the then-head of FTX, John Ray, first disclosed that a special working group was examining the possibility of relaunching the platform.
In April, Sullivan & Cromwell lawyers allowed the restructuring of the exchange with a relaunch, rather than liquidation or sale, at court hearings.
The presented timeline anticipated that a detailed plan would be submitted in the third quarter. In the same period, the idea of reviving FTX was voiced by former head of institutional sales Zane Takett. In his view, the platform should resume offering all products that existed prior to the collapse, adding a market for tokenized claims.
In a March presentation, the exchange’s representatives estimated the total shortfall to cover customer and creditor claims at $8.7 billion, of which about $1.6 billion was in Bitcoin.
In June, the new FTX leadership returned $7 billion in liquid assets.