FTX Payout Resume:
The payouts won’t go to former FTX CEO Sam Bankman-Fried or other former executives like Gary Wang, Nishad Singh, or Caroline Ellison of Alameda.
It has been declared by the bankrupt cryptocurrency exchange FTX that it will “resume conventional” cash payments, salaries, and benefits to its remaining staff members worldwide.
The announcement was made on November 28 by John Ray III, the newly appointed CEO of FTX, as the insolvency expert works to assist FTX and its about 101 related entities (FTX Debtors) as they navigate the U.S. Bankruptcy Court in Delaware.
“I’m happy to report that the FTX group has resumed making regular cash payments of salaries and benefits to our remaining employees worldwide in light of the Court’s acceptance of our First Day motions and the work being done on global cash management.
By the Bankruptcy Court-approved limits, he continued, “FTX is also making cash payments to selected non-U.S. vendors, and service providers were essential to preserve company operations.”
The declaration was made about ten days after the FTX debtors asked the Delaware bankruptcy court on November 19 to pay prepetition benefits and compensation to workers and contractors. Caroline Ellison, Gary Wang, Nishad Singh, and Sam Bankman-Fried, the former CEO and founder of FTX, were not paid, though.
Sharing our press release just issued: FTX Resumes Ordinary Course Payments of Employees and Certain Foreign Contractors
— FTX (@FTX_Official) November 28, 2022
According to the most recent notice, FTX’s remaining staff and contractors will soon receive income that was probably stopped after the company declared bankruptcy on November 11.
New CEO Statement:
Ray praised the FTX staff and foreign contractors for their support while acknowledging the financial difficulty the payment delay had caused them.
“We acknowledge the inconvenience caused by the brief suspension of these payments and are grateful to all of our esteemed partners and employees for their assistance.”
The relief will cover cash payments due to employees of FTX Trading and 101 other connected firms since the bankruptcy filing on November 11, in addition to the numerous vendors and service providers that FTX still needs to pay.
However, not all FTX subsidiaries and associated businesses would be subject to the payment resumption.
Only FTX Debtors’ employees and contractors will be granted relief in The Bahamas, the location of the crypto exchange, as FTX Digital Markets is the subject of a separate liquidation case in The Bahamas.
Read more: Fate Of NFTs In The Crypto Winter
Additionally, it won’t apply to FTX Australia’s employees and contractors in Australia because those parties are already involved in separate legal actions in Australia.
On November 22, FTX Trading declared that all “First Day” motions for issues connected to its bankruptcy petition on November 11 had been given interim and final clearances.
At the time, Ray stated that the motions would expedite FTX Debtor’s attempts to compensate other parties harmed by the trading platform’s failure, such as FTX users and creditors. Ray also noted that the new CEO had suggested that a potential buyout of FTX’s assets might be advantageous to stakeholders sooner rather than later.
However, considering the intricacy and extent of FTX’s collapse, some insolvency attorneys caution that the process might take years or even decades.
According to Stephen Earel, partner at Co Cordis in Australia and an insolvency lawyer, it will take years, if not decades, for the courts to ascertain who held which crypto assets before formulating a strategy to disperse those funds.
Read more :
In a filing filed as part of its Chapter 11 bankruptcy proceedings, FTX Trading admitted that it owed its top 50 creditors $3.1 billion.
FTX CEO has confirmed that its employees and contractors will be able to be paid regularly again after a period of “temporary interruption.”
Read More: As the FTX epidemic escalates, calls for regulation are becoming increasingly vocal.