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FTX debtors, led by chief restructuring officer John J. Ray III, have voiced their disapproval of traders and market makers within the Official Committee of Unsecured Creditors (UCC) who seek to gain control over assets. They argue that the UCC’s proposal to invest nearly $2.6 billion in cash reserves into short-term Treasuries is ill-advised in light of the FTX 2.0 draft restructuring plan.
In a court filing dated August 9, FTX responded to the UCC’s remarks concerning the reorganization and term sheet proposal. FTX strongly criticized the UCC’s efforts to control assets, particularly as it suggested that debtors allocate nearly $2.6 billion from cash reserves into short-term Treasuries to cover professional fees that could reach up to $330 million.
Screenshot of the debtors’ response to the UCC. Source: Court Listener
Conflicts have arisen between the UCC and debtors due to creditors claiming inadequate consultation and significant depletion of funds by FTX during the bankruptcy process. However, the Securities Exchange Commission (SEC) has expressed dissatisfaction with the limited interaction and unprofessional conduct exhibited by several UCC members.
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FTX’s restructuring team has recovered approximately $7 billion in liquid assets from the initial $8.7 billion owed to customers when the exchange filed for bankruptcy. Some creditors and experts have responded to FTX’s recent filing, arguing that the debtors are obstructing the reorganization process and disputing claims made by the UCC.
Related: Trust and transparency: Key trends in the CEX space post-FTX
The debtors have revealed a plan for the relaunch of FTX 2.0, as FTX CEO John Ray works to finalize all agreements and outstanding payments to enable the launch. Kraken CEO Jesse Powell has expressed doubts about FTX 2.0, stating that it is “more difficult than starting fresh,” pointing to the absence of a team, technology, licenses, and the damage to the brand’s reputation.
In addition, FTX has filed a motion to dismiss the Chapter 11 bankruptcy proceedings involving FTX Exchange FZE (FTX Dubai), arguing that the exchange never commenced the provision of cryptocurrency-related services to investors.
Magazine: Can you trust crypto exchanges after the collapse of FTX?
