Failed crypto exchange FTX’s debtors and liquidators reach a global settlement

The FTX exchange collapsed in November 2022 after a liquidity crunch [File]
| Photo Credit: AP

The debtors and liquidators of the failed crypto exchange FTX have reached a global settlement, that is due to be approved by a U.S. bankruptcy court and the Supreme Court of the Bahamas Court.

According to the agreement, the FTX debtors and FTX Digital Markets are to “pool assets and coordinate the establishment of reserves and the timing and amount of distributions” so that customers receive largely identical pay-outs at the same time. NFTs will not be considered as part of the claims, as per a press note announcing the agreement on Tuesday.

“All FTX.com customer claims for cash or digital assets (other than those relating to NFTs) will be valued in both proceedings in U.S. Dollars as of the applicable petition dates, with no differential payments based on post-petition fluctuations in asset prices,” said the press statement.

“The Global Settlement Agreement is another critical milestone for the FTX Debtors,” said John. J. Ray III, CEO and Chief Restructuring Officer of the FTX Debtors. “The unique challenges raised by the conflicting filings of the FTX Debtors and FTX Digital Markets have been some of the toughest the team has faced. But we recognized at the beginning that we have an overlapping constituency: FTX customers. I am thrilled to have achieved a settlement so clearly in customer interests, one that also respects the important role to be played by the Joint Official Liquidators and The Bahamas in the global recovery effort.”

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The FTX exchange collapsed in November 2022 after a liquidity crunch where users tried to pull out assets worth billions of dollars. Ex-CEO Sam Bankman-Fried was convicted of seven criminal charges related to fraud, after it was learned he was using FTX customer funds to support a sister company, Alameda Research.

Bankman-Fried could spend decades in prison.