FTX debtors, led by CEO and Chief Restructuring Officer John J. Ray III, expressed displeasure with traders and market makers within the Unsecured Creditors Official Committee (UCC) seeking to gain authority over the asset. They believe that UCC’s plan to invest nearly $2.6 billion in cash reserves in short-term treasuries in the draft FTX 2.0 restructuring plan is a bad idea.
In an August 9 court filing, FTX release Response to UCC’s Comments on Reorganization and Term Sheet Proposal. FTX strongly criticized the UCC’s pursuit of asset control, not least because it advised debtors to allocate nearly $2.6 billion of their cash reserves to short-term treasuries, aimed at paying up to $330 million in professional fees.
A dispute arose between UCC and debtors as creditors claimed that FTX was under-counselled and severely depleted of funds during the bankruptcy filing. However, the SEC expressed dissatisfaction with the limited participation and unprofessional conduct of many UCC members.
FTX’s restructuring arm has recovered about $7 billion in liquid assets from the original $8.7 billion owed to clients when the exchange entered bankruptcy proceedings.Certain creditors and experts have reacted FTX’s recent filing said the debtors were blocking the reorganization process and disputed UCC’s claims.
related: Trust and Transparency: Key Trends in the Post-FTX CEX Space
Debtors unveiled a strategy for relaunching FTX 2.0, and Ray worked to finalize all agreements and outstanding payments to facilitate the launch. Kraken CEO Jesse Powell expressed skepticism about FTX 2.0, claiming it was “more challenging than starting over,” citing a lack of team, technology and licenses, and a damaged brand reputation.
Meanwhile, FTX has filed a motion to dismiss Chapter 11 bankruptcy proceedings involving FTX Exchange FZE (FTX Dubai), claiming that the exchange has never provided cryptocurrency-related services to investors.
Magazine: Can You Still Trust Cryptocurrency Exchanges After FTX Crashes?
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