In a joint press statement released on Friday, the FTX’s U.S. group and Bahamas liquidators have expressed a positive collaboration to resolve a two-month-long investor fund recovery dispute. Both parties have indicated their intentions to share information, execute proper litigation measures with third parties, and address asset disposal issues raised earlier on.
In November, FTX trading in the United States and FTX Digital Markets based in the Bahamas filed conflicting bankruptcy proceedings in the two countries. Since then, John Ray III (FTX CEO) U.S. group has been at loggerheads with the Bahamas liquidators alleging proceedings interference from either side.
On Nov. 10, the Bahamas Securities Commission began liquidation proceedings targeting FTX Digital markets. While this was happening, Chapter 11 proceedings commenced the following day in Delaware, incorporating more than 100 FTX entities in the United States.
How Did the Conflict Erupt?
The contention began when legal counsel representing the U.S-based FTX Trading requested the court judge to deny Bahamas liquidators access to FTX IT tools, Google and Amazon cloud services.
Aggrieved by the comments and bankruptcy proceedings from the U.S. group, the Bahama’s side reiterated by excluding themselves from the FTX Trading bankruptcy proceedings in the United States. Additionally, accusing the U.S. group of inaccurate statements regarding token minting.
FTX’s asset valuation had fuelled a major conflict between the two parties. Earlier in December, the Bahamas Securities Commission had reported having secured $3.5 billion worth of FTX customer assets. A value that the U.S. FTX Trading group dismissed as a ‘material misstatement’ and misleading information.
After a two-month long back and forth allegations from both sides, FTX CEO John Ray III is optimistic about a joint collaborative process to resolve their issues, stating that:
“We would like to thank all of the Joint Provisional Liquidators of FTX DM for constructive meetings this week in Miami and all their work on behalf of their estate,” “There are some issues where we do not yet have a meeting of the minds, but we resolved many of the outstanding matters and have a path forward to resolve the rest.”
What Have They Agreed Upon Moving Forward?
Following the Miami meetings and Friday’s press statement, it’s expected that FTX Digital Markets will be actively involved in the United States Bankruptcy hearings. On the other hand, FTX Trading will take part in the Bahamas assets liquidation process.
Among the issues agreed upon include the disposal of FTX real estate properties. Surprisingly, both parties have agreed to let liquidators take care of the process. Besides the agreement, the Bahamas Supreme Court and the U.S. bankruptcy court have been tasked with overseeing the entire process. The courts must sign a cooperation agreement soon to address the matter.
Comments (No)