Defunct crypto exchange FTX has unveiled an ambitious plan to reorganize its creditors, dividing them into distinct classes of claimants and proposing an option for certain customers to relaunch the FTX exchange.
The proposal, filed Monday night U.S. time, categorizes the claimants into several groups. These include "dotcom customers" of FTX.com offshore exchange, "U.S. customers" of the domestic exchange, customers of its NFT exchange, and other classes such as general unsecured claims, secured claims, and subordinated claims. Among the general claims are those related to Alameda's lenders or trading partners, while subordinated claims consist of taxes and fines from penalties.
According to the document, the priority of these claims will follow a hierarchical structure referred to as "waterfall priorities." Each class of claimants will receive a pro-rata payout from the remaining funds after the preceding class has been paid. The exact order of the payout is yet to be determined, subject to negotiations with stakeholders.
A new chapter for FTX exchange?
An intriguing part of the proposal is the option for the dotcom claimants category to pool their assets to create what the filing refers to as an "offshore exchange company" or a "rebooted" platform, which would be inaccessible in the U.S. The consideration for such an arrangement might include non-cash offerings like equity securities, tokens, or rights to invest in the new venture, rather than a straightforward cash payout.
Hints of a possible reboot of FTX have emerged previously, with interim CEO John Ray III's billings from May alluding to an "FTX restart" or "2.0 reboot."
One notable figure in the crypto community, Singapore-based anthropomorphic penguin and Twitter legal personality Wassielawyer, pointed out that the restructuring plan fails to include provisions for holders of FTT, the exchange's native token. The SEC had previously deemed the token a security in a complaint filed against FTX co-founder Gary Wang and former Alameda Research CEO Caroline Ellison in December.
The proposed plan represents a new chapter for the beleaguered exchange and brings both hope and complexity to the process of satisfying its creditors. Whether the reboot option becomes a reality and how the various claimants respond to the proposed structure will be closely watched developments in the unfolding saga of FTX.
FTT is up 6% and trading at $1.43.
