The bankrupt crypto exchange FTX has submitted a draft reorganization plan to the courts to pay back creditors.
The draft plan, with a US bankruptcy court on Monday, calls for scrapping claims based on holdings of the disgraced company’s native token, FTT.
The draft says the FTT-based claims against the exchange should be dropped due to the “equity-like characteristics” of its native token. It also calls for canceling any other equity interests.
FTX plans to pay back other debtors and customers in cash. The company’s CEO, John J. Ray III, in a press release that the submitted plan is designed to elicit creditor feedback.
“Our goal is to achieve a consensual plan and emergence from bankruptcy. We are committed to working through these matters in the third quarter of 2023 and to filing an amended plan and a disclosure statement in the fourth quarter of 2023.”
FTX first shut down in November after FTT collapsed and it was forced to halt customer withdrawals.
Ray, who also oversaw the liquidation of the infamous American energy company Enron, took over for disgraced former CEO Sam Bankman-Fried after the exchange declared bankruptcy.
The recently submitted draft reorganization plan also confirmed that Ray is considering restarting FTX’s operations. The document states the company “may decide,” with the help of third-party investors, to restart the exchange in a foreign jurisdiction as an offshore platform not available to US customers.
Bankman-Fried faces a slew of charges for allegedly defrauding customers and mishandling billions of dollars worth of their funds, as well as making illegal political donations. If convicted, he could face more than 100 years in prison.
The Department of Justice (DOJ) also in a court filing last week that it is unsatisfied with Bankman-Fried’s current bail terms, accusing the disgraced crypto entrepreneur of tampering with witnesses and obstructing investigations.
