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According to a January 6th, 2023, press release, FTX Trading Ltd., and its affiliated debtors, and FTX Digital Markets Ltd., acting by the Joint Provisional Liquidators, announced their “agreement on terms for mutual cooperation in the Chapter 11 cases of the FTX Debtors in Delaware and the provisional liquidation of FTX DM in The Bahamas”.
The term Chapter 11 of the United States Bankruptcy Code, permits reorganization under the bankruptcy laws of the United States.
However the new management at FTX and liquidators in the Bahamas have disagreed for weeks over who controls the FTX’s cash and crypto assets. On the other hand, since November 11, 2022, FTX has been in Chapter 11 bankruptcy proceedings in the US court system. After the collapse of FTX, the Royal Bahamas Police Force launched a criminal investigation into the firm.
The Cooperation Agreement
According to the Wall Street Journal, FTX’s new management and liquidators in the Bahamas have signed an agreement to cooperate and collect assets on behalf of creditors. This agreement also capped off a prolonged row between the two parties over who controls the bankrupt exchange’s remaining property.
Reportedly, both parties are satisfied by the Bahamas Securities Commision’s safeguarding of FTX’s assets. The matter has been publicly controversial since Dec. 29, as the Bahamas Securities Commission admitted to holding $3.5 Billion of crypto. FTX also claimed that regulators seized $300 Million without any right to do so.
Both have agreed to share information, as well as help to secure and distribute assets that belong to FTX entities in the Bahamas and abroad, as mentioned in the press release.
John J. Ray III, the Chief Executive Officer and Chief Restructuring Officer of the FTX Debtors said “We would like to thank all of the Joint Provisional Liquidators of FTX DM for constructive meetings this week in Miami and all their work on behalf of their estate.”
“There are some issues where we do not yet have a meeting of the minds, but we resolved many of the outstanding matters and have a path forward to resolve the rest,” he further added.
In addition, Brian J. Simms, K.C. said “Our meetings stressed our shared objective to find the best solution for customers and creditors of the FTX.com platform. Each jurisdiction has different tools available to accomplish that objective and we look forward to working collaboratively to optimize outcomes for all of our respective stakeholders.”
It must be noted that this agreement awaits approval in two jurisdictions: “the U.S. Bankruptcy Court in Delaware, which is handling FTX Trading Ltd.’s bankruptcy proceedings, and the Supreme Court of The Bahamas, which is handling FTX Digital Markets’ liquidation.”
Nancy J. Allen is a crypto enthusiast, with a major in macroeconomics and minor in business statistics. She believes that cryptocurrencies inspire people to be their own banks, and step aside from traditional monetary exchange systems. She is also intrigued by blockchain technology and its functioning. She frequently researches, and posts content on the top altcoins, their theoretical working principles and technical price predictions.
