FTX Debtors and Liquidators Agree on Plan to Maximize Stakeholder Recoveries

• FTX debtors and Bahamas liquidators have agreed on a plan to maximize stakeholder recoveries.
• This plan includes sharing information, returning property, and filing litigation against other parties.
• The parties have also settled on inventorying crypto assets that the Bahamas Securities Commission currently holds in a Fireblocks wallet.

The two halves of FTX, its debtors in the U.S. and its liquidators in the Bahamas, have recently agreed on a plan to maximize stakeholder recoveries. This agreement was reported in a press release on Jan. 6.

John J. Ray III, FTX’s CEO and Chief Restructuring Officer, expressed his gratitude for the agreement and stated that, although discussions will continue, many issues have been settled. The press release indicates that the two parties will cooperate on various efforts. Specifically, the parties have agreed to share information, arrange the return of property, and file litigation against other parties. Additionally, they will attempt to maximize stakeholder recoveries, meaning that former FTX customers will be made whole.

Furthermore, the two parties have settled on inventorying crypto assets that the Bahamas Securities Commission currently holds in a Fireblocks wallet. The matter has been publicly disputed since Dec. 29, when 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. However, both parties are reportedly satisfied by the Bahamas Securities Commission’s safeguarding of those assets.

The agreement is a major step forward for FTX customers in recovering their assets. It remains to be seen how successful the asset recovery plan will be, but the parties are optimistic. With the cooperation of the two parties, it is likely that the assets will be recovered in due time.