FTX Announces Global Settlement With The Bahamas Subsidiary: Fund Recovery on Horizon?

10 months ago 3

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While FTX Trading Ltd announced the settlement with the FTX Digital markets (the Bahamas subsidiary of the company), the consumers would have to wait till at least the second quarter of 2024 for the funds’ recovery.

FTX Trading Ltd has been under the bankruptcy proceeding for over a year now. Meanwhile, the consumers eagerly await the recovery of their funds.

The FTX Settlement Needs the Courts’ Approval

As FTX Trading Ltd falls under the jurisdiction of the United States, it has signed a settlement agreement with its Bahamas subsidiary. The subsidiary in the Bahamas is currently undergoing liquidation proceedings in a separate jurisdiction. Hence, the agreement aims to enable the parties to work together.

However, the settlement agreement hasn’t been finalized yet. It needs approval from both the US Bankruptcy Court and the Supreme Court of the Bahamas.

The agreement discusses various aspects focused on the recovery of consumers’ funds. As a part of the FTX settlement, the parties have agreed to pool the funds of customers of FTX.com to ensure identical relative distribution.

During Q2 2024, customers of FTX.com will have the opportunity to vote on whether they prefer their claims to be paid through the US or the Bahamas jurisdiction. This implies that customers may be unable to recover their funds until at least Q2 2024.

John J. Ray III, the CEO of FTX, said:

“The Global Settlement Agreement is another critical milestone for the FTX Debtors.

The unique challenges raised by the conflicting filings of the FTX Debtors and FTX Digital Markets have been some of the toughest the team has faced. But we recognized at the beginning that we have an overlapping constituency: FTX.com customers.

I am thrilled to have achieved a settlement so clearly in customer interests, one that also respects the important role to be played by the Joint Official Liquidators and The Bahamas in the global recovery effort.”

After the announcement of the FTX settlement, the FTX Token (FTT) skyrocketed by nearly 30% in one hour.

FTT/USDT 1-hour timeframe, Binance. Source: TradingView

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