- FTX revealed plans to relaunch back in April.
- Potential relaunch and offshore services resumption announced in July end.
- Proposed plan for claimants, FTT holders excluded.
As a formerly leading U.S. exchange, the collapse of FTX was one of the most shocking events in crypto history. Despite its immense reputational damage, CEO John Ray III, who stepped into the role following Founder Sam Bankman-Fried’s resignation, seems to believe that the situation is not beyond recovery.
Following a series of meetings, the FTX CEO was revealed to be exploring the viability of relaunching the exchange in Q2 2023. Those plans now seem to be in motion as FTX confirmed plans to restart the crypto exchange’s services for offshore customers.
FTX Introduces Proposal for Offshore Customers
On July 31st, FTX released a proposal in which they plan to establish a new offshore company that offers its claimants the opportunity to hold equity securities, tokens, or other interests. The proposal outlines the creation of three primary recovery pools: the “Dotcom Customer Pool”, representing users of FTX.com; the U.S. Customer Pool, representing FTX US. users; and the General pool. The three pools would handle all fiat, digital, and specified assets linked to FTX.com and FTX US.
To support the Dotcom Customer Pool, the bankruptcy administrator proposes establishing a new company in collaboration with third-party investors, operating an offshore platform accessible only to non-U.S. investors.
Under the plan, Dotcom customers would receive a proportional share of the proceeds from assets tied to the FTX.com exchange, following deductions for the Dotcom customer convenience class and expenses.
The draft plan remains open to amendments based on feedback from Consulting Parties and other stakeholders.
FTX: Behind the Scenes
As per the plan, former FTT holders will not receive anything. The FTX Debtors have submitted their Initial Plan of Reorganization and a summary term sheet to gather feedback from creditors and stakeholders regarding the plan.
The crypto community seems unconvinced by the proposal, with many voicing their dissent on public forums such as Twitter.
One user, “if_sbf”, highlighted the ongoing controversy surrounding memecoin $BALD, which has alleged links to Sam Bankman-Fried.
A tweet commenting on FTX’s decision reads:
While SBF’s involvement with the memecoin has not been confirmed, it is clear that crypto users are not ready to overlook suspicious activities pertaining to either him or the exchange he founded.
On the Flipside
- FTX’s FTT token has surged by 10% following the news.
- Former FTX CEO, Sam Bankman-Fried, has consented to a gag order, preventing him from giving comment to third parties that could influence his trial.
- SBF contends that other potential witnesses, including current FTX CEO John Ray, should be subject to similar restrictions.
Why This Matters
The leadership changes, liquidity concerns, and FTT holders’ exclusion impact the company’s future. The proposed plan and recovery pools offer insights into addressing customer claims. The market’s response to the FTX token surge indicates investor sentiment. Additionally, the gag order raises legal implications and transparency concerns.
To learn more about SBF’s efforts in restarting the exchange, click here:
To learn more about Australia’s Bendigo Bank blocking risking crypto payments, click here: