FTX Bankruptcy Update: Revised Reorganization Plan Scheduled for Mid-December 2023

• FTX’s upcoming revised reorganization plan aims to address stakeholder interests during bankruptcy.
• Regulators have hinted at possible approval for a FTX revival, subject to legal compliance under new leadership.

While in bankruptcy, FTX, The embattled cryptocurrency exchange is preparing to introduce an updated reorganization plan in mid-December. This is an important step that can shape the future of creditors and stakeholders.

Insight into Restructuring Planning

The Official Committee of Unsecured Creditors recently revealed details of its proposed revised reorganization plan in response to the FTX 2.0 Customer Ad Hoc Committee. The revised plan, scheduled for mid-December, aims to redefine the fate of unsecured creditors and try to harmonize different views on asset valuation and distribution among stakeholders.

Key activities and evaluation

Activities within the bankruptcy proceedings, including potential acquisitions such as that of financial services company Perella Weinberg, will be subject to court approval. Terms such as recovery rights tokens mentioned in communications from the FTX 2.0 Customer Ad Hoc Committee are under scrutiny by both the Official Committee and potential trading participants.

As part of the bankruptcy filing, FTX and its affiliates began a comprehensive evaluation of its global assets. The purpose of this review is to optimize recoverable value for stakeholders. However, FTX made it clear that Perella Weinberg’s intervention would require court approval.

Collaborative efforts amid uncertainty

The Official Committee expressed its commitment to continue working with the FTX 2.0 Customer Ad Hoc Committee to resolve the complex reorganization process in the coming months.

Regulatory perspectives and future leadership

U.S. Securities and Exchange Commission (SEC) Chairman Gary Gensler has hinted at potential approval of the revived FTX cryptocurrency exchange under new leadership. However, Gensler emphasized that such approval depends on strict adherence to legal boundaries.

Also Read: SEC’s Gary Gensler Sets Conditions for FTX Exchange Reopening

There has been speculation that Tom Farley, the former chairman of the New York Stock Exchange, was involved in a potential takeover bid for the bankrupt cryptocurrency exchange led by Sam Bankman-Fried, who was previously convicted of fraud.