FTX Creditors And Debtors' Latest Dispute Overshadows Reorganization Plan

FTX Hits Back At Creditors For Seeking Control Over Assets

According to a filing in the court on August 9, FTX responded to a statement by the UCC in response to the draft plan of reorganization and term sheet. FTX blasted the UCC for seeking control over debtors’ assets after it called on debtors to invest nearly $2.6 billion cash reserves in short-term Treasuries to offset professional fees of up to $330 million.

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Disputes arise between the UCC and debtors as creditors allege a lack of consultation and FTX losing most funds amid the bankruptcy filing. However, SEC is frustrated about lack of involvement and unprofessional conduct from many members of the UCC.

“The Debtors hope that the members of the Committee will constructively engage in these negotiations and actually sit down in person alongside the Ad Hoc Committee, customers and stakeholders holding other views in an effort to achieve the optimal result for all those impacted by FTX’s fall.”

FTX’s reorganization team has recovered about $7 billion in liquid assets from $8.7 billion the exchange owed customers when it filed for bankruptcy.

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Some creditors and experts responded to the latest filing by the FTX, arguing that debtors are delaying the restructuring and rejecting statements from UCC.

Also Read: Terra Luna Classic L1 Developer Team Announces Core Upgrade, LUNC To Recover?

FTX 2.0 Launch

Debtors revealed a plan for FTX 2.0 relaunch, with FTX CEO John Ray seeking the completion of all settlements and pending wages to launch FTX 2.0. Kraken CEO Jesse Powell believes FTX 2.0 is “worse than starting from scratch,” pointing to the absence of a team, technology, and licenses, as well as a tarnished brand.

Meanwhile, FTX filed a motion to dismiss the Chapter 11 bankruptcy case of FTX Exchange FZE (FTX Dubai), claiming that the exchange never started offering crypto-related services to investors.

Also Read: Lawyer Says US SEC Challenging XRP ODL Sales Is A Big Concern For Ripple

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