In a bold move to expand its global reach, leading cryptocurrency exchange FTX has announced plans to relaunch its services for international customers. The decision comes after a period of regulatory hurdles that temporarily restricted access for non-US users. With the new initiative, FTX plans to restart its business and its position as a major player in the fast-growing world of digital assets.
The proposed reorganization scheme outlines a strategy for a particular group of debtors to combine their assets, forming a new offshore exchange. The bankruptcy administrators have submitted a plan that envisions the potential revival of FTX.com, but the re-launched platform will exclusively cater to offshore customers. Unfortunately, FTT token holders will not receive any compensation as part of this plan.
FTX’s Rebirth: Proposed Pathway for Revival through Creditor Reorganization
The now-defunct cryptocurrency exchange FTX plans to restart business and has put forth a proposal to categorize its creditors into various classes based on their claims. Among these classes, one specific group of claimants is being offered a pathway to potentially revive the FTX exchange with the involvement of third-party investors, contingent on their agreement with the plan.
The filing made public on Monday night, U.S. time, classifies the claimants into distinct groups. The initial group comprises “dot-com customers,” representing claimants of FTX.com’s offshore exchange. Following them are “U.S. customers,” representing customers of the U.S. exchange, and “NFT exchange customers.” The subsequent groups consist of general unsecured claims, secured claims, and subordinated claims. Among the general claims are those originating from Alameda’s lenders or trading partners, while subordinated claims encompass taxes and fines arising from penalties.
Claimant Priorities and Options: Navigating Payouts and Creating an Exclusive Offshore Platform
The hierarchy of these claims will be established based on “waterfall priorities,” ensuring that each class receives a proportional payout from the remaining pool once the preceding class has been compensated. The exact sequence of payouts will be determined through negotiations with stakeholders.
Within the Dotcom claimants category, which represents former customers of FTX.com, members have the option to aggregate their assets to establish either an “offshore exchange company” or a “rebooted” platform, with operations restricted from the U.S. market.
Flexible Compensation Options: Exploring Non-Cash Considerations for Dotcom Customers
Instead of providing full cash compensation, the debtors have the option to offer non-cash considerations to the Dotcom Customer Pool. These considerations may take the form of equity securities, tokens, or other interests in the Offshore Exchange Company, granting the debtors the opportunity to invest in such equity securities, tokens, or interests. This approach implies that the debtors could opt for a stake in the new exchange rather than a cash payout.
Previous indications of potential FTX reboots were hinted at in previous billing filings from interim CEO John Ray III in May, referring to an “FTX restart” or a “2.0 reboot.” Singapore-based Wassielawyer, a crypto Twitter legal personality represented as an anthropomorphic penguin, pointed out that the proposed restructuring plan does not account for holders of FTT. The SEC classified the FTT token as security in a December complaint lodged against FTX co-founder Gary Wang and former Alameda Research CEO Caroline Ellison.
As per the document, no holder of an FTT claim will receive any distributions concerning their FTT claim. Upon the Effective Date, all FTT claims will be nullified, released, and rendered invalid, regardless of whether they are surrendered for cancellation. According to CoinDesk market data, FTT has witnessed a 10.5% increase in value, currently trading at $1.50.
FTX plans to restart the business of its crypto exchange for international customers, which marks a significant step towards global expansion. The exchange aims to create a new offshore platform by reorganising creditors and offering non-cash considerations. However, FTT token holders would not receive any payout under the plan. While the future remains uncertain, FTX’s determination to navigate regulatory challenges, provide innovative offerings, and empower its user base holds the potential to shape the future of the cryptocurrency landscape.
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