The FTX’s debtors have clashed with the Official Committee of Unsecured
Creditors (UCC) over the control of the asset of the collapsed cryptocurrency
exchange. The disagreement over the allocation of the asset of the
company has been complicated by plans to relaunch the exchange’s operations outside the US.
The FTX’s debtors, led
by the Chief Restructuring Officer John Ray III have disputed the recommendation
of UCC to invest USD $2.6 million from the exchange’s cash reserves in
short-term Treasuries. According to a court document filed yesterday
(Wednesday), the debtors are arguing that this step will affect the proposed
relaunch of FTX.
FTX Debtors vs. UCC
FTX’s debtors have
responded to UCC’s recommendation to allocate a significant sum of cash
reserves amounting to USD $330 million to cover professional fees. However, the
exchange’s debtors argue that there were insufficient consultations and much of
the company’s funds were depleted when the company sought bankruptcy protection
last November.
“The committee
complains about the debtors’ failure to invest in treasury securities, but
ignores that such a strategy would require relief from this court given that
the debtors’ cash is collateralized by 115% under section 345 of the Bankruptcy
Code,” the court document explained.
Amid the legal tussle,
the Securities
and Exchange Commission (SEC) has
expressed concerns over the limited consultations and the alleged
unprofessional behavior exhibited by certain members of UCC, according to a
report by Cointelegraph. So far, the FTX’s restructuring team has recovered
USD $7 billion out of
USD $8.7 billion believed to have been misappropriated by the former executives
of the exchange.
FTX 2.0
More than a week ago, Finance Magnates reported that FTX had proposed a plan to relaunch
the exchange outside the US in
collaboration with third parties. Thus, FTX has
categorized claimants of the defunct exchange into distinct groups. One of the
groups is the claimants of FTX.com, the offshore exchange, which has been
labeled as ‘dotcom customers’.
The ‘dotcom’ claimants have been presented with an opportunity to
contribute their assets towards the establishment of the offshore exchange. The
proposal states that the claimants will forgo their entitlement to receive cash
compensation and will…
