The bankrupt cryptocurrency exchange FTX has announced that it will “resume regular payments” of cash, wages and benefits to its remaining employees worldwide..
The announcement was made by the new CEO of FTX, John Ray III, on November 28.as the insolvency professional seeks to help FTX and its approximately 101 affiliated companies (FTX debtors) navigate the US Bankruptcy Court in Delaware.
“As the Court approved our first day motions and given the work being done on global treasury management, I am pleased that the FTX group is resuming regular course cash payments of wages and benefits to our employees. remaining around the world.
“FTX is also making cash payments to certain non-US vendors and service providers when necessary to preserve business operations.subject to limits approved by the Bankruptcy Court,” he added.
The announcement comes about 10 days after FTX debtors filed a motion to pay pre-contest compensation and benefits to employees and contractors on November 19 with the Delaware bankruptcy court.which excludes payments to former FTX CEO and founder Sam Bankman-Fried, along with Gary Wang, Nishad Singh and Caroline Ellison.
Sharing our press release just issued: FTX Resumes Ordinary Course Payments of Employees and Certain Foreign Contractors
https://t.co/8CDnlsvu2j—FTX (@FTX_Official) November 28, 2022
Our Just Issued Press Release: FTX Resumes Regular Course Payments to Its Employees and Certain Foreign Contractors
https://t.co/8CDnlsvu2j
The latest announcement means that remaining FTX employees and contractors will receive nearly three weeks of pay, which presumably stopped after the company filed for bankruptcy on November 11.
Ray acknowledged the financial hardship imposed on FTX employees and foreign contractors and thanked them for their support..
“We recognize the difficulties imposed by the temporary interruption of these payments and we thank all of our valued employees and partners for their support.”
The relief will include cash payments owed to workers at FTX Trading and 101 other affiliated companies since the November 11 bankruptcy filing.in addition to the many suppliers and service providers that FTX still has to pay.
Nevertheless, the resumption of payments will not apply to all FTX affiliates and related companies.
In the Bahamas, where the cryptocurrency exchange is based, only employees and contractors of FTX debtors will receive the relief.but not those who worked for FTX Digital Markets, which is subject to a separate liquidation proceeding in the Bahamas.
It will also not apply to Australian-based employees and contractors for FTX Australia and its subsidiary FTX Express.which are also subject to separate proceedings in Australia.
On November 22, FTX Trading announced that it had received provisional and final approvals for all “day one” motions for matters related to its November 11 bankruptcy filing..
At the time, Ray said he hoped the motions would expedite the FTX debtor’s efforts to reimburse other stakeholders affected by the collapse. of the trading platform, such as FTX users and creditors, and the new CEO suggested that a potential purchase of FTX assets could benefit stakeholders sooner rather than later.
Nevertheless, some insolvency lawyers warn that the process could take years, or even decades, given the complexity and scope of the FTX collapse.
Insolvency lawyer Stephen Earel, a partner at Co Cordis in Australia, recently told Cointelegraph that It will take courts several years, if not decades, to determine who owned which crypto assets before coming up with a plan to redistribute those funds..
FTX Trading alone owes its top 50 creditors $3.1 billion, according to a document filed as part of your Chapter 11 bankruptcy proceeding.
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