FTX proposes to ‘reboot’ offshore exchange as part of reorganization plan

Quick Take

  • FTX’s bankruptcy administrator said the collapsed firm may set up a new company to operate a “rebooted” offshore exchange for FTX.com claimants, allowing them to opt in to hold equity securities, tokens or other interests in the new offshore company.

Failed cryptocurrency exchange FTX today filed a draft plan of reorganization in which it proposed the establishment of a “rebooted” offshore exchange available to non-U.S. users.

FTX said in a draft plan submitted Monday that the debtors intend to sort claimants into a number of groups, with FTX.com offshore exchange users classified as “dotcom customers” and FTX US users as “U.S. customers.”

Each holder of a dotcom customer entitlement will receive a pro-rata share of the proceeds from a pool of assets associated with the FTX.com exchange, net of distributions to the dotcom customer convenience class and expenses, according to the plan.

Specifically, for the dotcom customer pool, the bankruptcy administrator proposed to set up a new company with third-party investors to operate a “rebooted” offshore platform — which would not be available to U.S. investors. Alternatively, it may enter into a merger or similar transaction.

“Rather than all cash, the Debtors may determine that the Offshore Exchange Company remit non-cash consideration to the Dotcom Customer Pool in the form of equity securities, tokens or other interests in the Offshore Exchange Company, or rights to invest in such equity securities, tokens or other interests,” the filing said.

FTT claims to be canceled

For FTT holders, the filing said that their claims “will be canceled and extinguished as of the Effective Date and holders will not receive any distribution.”

Claims from non-customers, such as those for regulatory penalties and taxes, would be subordinated, according to the document.

Disclaimer: The former CEO and majority shareholder of The Block has disclosed a series of loans from former FTX and Alameda founder Sam Bankman-Fried.

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