FTX announces current total assets! Priority will be given to repaying customers and creditors

The allegedly bankrupt FTX exchange revealed in court documents filed yesterday that they expect to negotiate to reduce the amount of the US government’s bankruptcy claim against it from the previous amount to 30 between 100 million and 5 billion US dollars. While the exact amount is still subject to change, the exchange appears to be seeking to negotiate to reduce the financial liability it faces.

FTX estimates it will have $13.7 billion in assets to pay $31.4 billion in legal claims. The claims include $9.2 billion in customer claims and $17 billion in claims from the U.S. Commodity Futures Trading Commission (CFTC) and the IRS.

Customer and creditor claims will take priority over U.S. government

FTX emphasized that its customers, Alameda Research lenders, as well as administrative expenses and non-government creditor claims will be paid first, ensuring that any government and tax claims will be paid first. be paid off before. This move will help protect customers' repayments from significant losses from government and tax claims.

While the amount of the U.S. tax claim has not yet been determined, the debtors will have the opportunity to distribute remaining proceeds to shareholders once all government and tax claims are paid, according to reports. However, FTX acknowledged that FTX investors and shareholders could be harmed by founder Sam Bankman-Fried’s (SBF) fraud, and they have little hope of receiving any funds from FTX’s bankruptcy case.

FTX proposes to distribute 100% of the SDNY relief proceeds to creditors including FTX.com customers and Alameda lenders, as well as the settlement with BlockFi. This proposal aims to ensure a fair distribution of funds or assets returned by SDNY so that all parties can receive due benefits and compensation.

FTX Compensation Sequence

According to the document, after deducting administrative expenses and repayment of non-governmental creditors, up to 25% of the distributable value will be used to pay U.S. federal income taxes. The remaining funds will be used to pay claims from the Commodity Futures Trading Commission and other government agencies.

The order of payment will be: SDNY proceeds will be distributed to FTX customers and Alameda lenders>>Administrative fees and priority or administrative taxes will be repaid>>Claims will be paid until all non-governmental creditors The U.S. dollar value is fully paid off>> 25% of the remaining value will be used for U.S. federal income tax purposes>> The final remaining assets will be transferred to the Civil Mitigation Fund, which will be available for payments to the filing creditors, meaning These creditors are expected to receive the increase in cryptocurrency value between the date of bankruptcy and the date of the complaint.

Previously, FTX said in January that it expected to pay customers "in full" but would be based on cryptocurrency prices when it filed for bankruptcy protection in November 2022 (BTC16,871, ETH1258, SOL16 ) valuation, which made many FTX customers very dissatisfied.

FTX bankruptcy lawyer team was again accused of "conflict of interest"

On the other hand, Sullivan & Cromwell (S&C), the law firm responsible for FTX's bankruptcy, was accused of potential conflicts of interest and ethics on Thursday. Legal experts named names. According to "TheBlock", two law professors at Temple University and the University of Pennsylvania, Jonathan Lipson and David Skeel, alleged in a paper published last week that S&C used "deceptive tactics" to gain control of former CEO SBF. Seized control of FTX and sought personal benefit from Chapter 11 bankruptcy proceedings.

SBF has repeatedly complained that S&C pressured him to file for bankruptcy protection and force him to appoint John Ray as CEO. FTX creditors filed a class action lawsuit against S&C last month, claiming that the company served as a consultant to FTX before its bankruptcy, understood the operation of the exchange, and ultimately supported its fraud. The two professors said: S&C may have violated its ethical obligations of confidentiality, candor and loyalty by reporting these criminal allegations to prosecutors without client consent and deceiving SBF into handing control of FTX to Ray (selected by S&C) and promising SBF will play an important role in the restructuring, S&C must have known that these promises were false. If S&C waits a few more days to file for Chapter 11 bankruptcy, Bankman-Fried could get new funding. A spokesperson for S&C countered the paper with a statement from FTX: "In support of SBF, at the expense of his victims and the professionals, certain academics and others who worked tirelessly to correct the harm he caused. In an apparent concerted effort to repeat his false narrative in an attempt to enhance his standing and image before the court that was about to sentence him. If the SBF's tactics were followed, billions of dollars would have been lost or stolen, while the amount recovered for clients will be a fraction of what we expect now. It's time to put the blame where it belongs."

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