FTX, which filed for bankruptcy, has submitted a proposal to restart its international exchange, but it hinges on the agreement of offshore customers, according to a July 31 court filing.
The proposal outlined FTX’s classification of its creditors into various categories, including international users referred to as the “dot-com customers.” Other categories include FTX.US customers, users of its NFT exchange, general unsecured claims, secured claims, and subordinated claims. Notably, the subordinated claims creditors, encompassing fines and taxes owed to authorities, have a lower priority for repayment than other creditors.
Under the proposal’s waterfall approach, each class of creditors would receive a pro-rata payout from remaining assets after payments to higher-ranking classes. However, international customers have the option to combine their assets to establish an offshore exchange unavailable in the United States, instead of receiving cash payouts.
In this potential offshore platform, these customers would hold a stake and may receive non-cash consideration in the form of equity securities, tokens, or other interests in the Offshore Exchange Company, or rights to invest in such assets. While this proposal is set to proceed, holders of FTT (FTX’s token) would not be compensated for their losses, as their claims would be “canceled, released, and extinguished” on the proposal’s effective date.
The FTT token has experienced an 8.46% increase in the past 24 hours, following an initial surge of 21%. The token reached a peak of $1.64 before settling at $1.45 at the time of reporting. Nevertheless, the restart plan is facing opposition from FTX’s unsecured creditors, who argue that the proposal neglects their recommendations.
The Unsecured Creditors Committee (UCC) has expressed dissatisfaction with the proposal’s lack of consideration for their selected crypto experts to oversee post-reorganization entities. Additionally, they have suggested creating a regulatory-compliant recovery token and fairly allocating value to the most affected creditors. The UCC further criticized the FTX liquidators for not acting on their recommendations, such as investing a portion of the cash balance into treasury bills or engaging in staking and other monetization schemes.
