FTX’s CEO and chief restructuring officer, John J. Ray III, along with other debtors, are expressing dissatisfaction with certain members of the Official Committee of Unsecured Creditors (UCC), who are attempting to gain control over assets.
These debtors are raising concerns about the UCC’s proposal to invest around $2.6 billion from cash reserves into short-term Treasuries.
They believe this move contradicts the FTX 2.0 draft restructuring plan.
In an official response filed on August 9, FTX addressed the UCC’s opinions regarding the reorganization and term sheet proposal. FTX criticized the UCC’s pursuit of asset control, especially their recommendation to allocate the cash reserves to cover professional fees, which could total up to $330 million.
Tensions have arisen between the UCC and debtors due to allegations that creditors were not adequately consulted and that FTX substantially depleted funds during the bankruptcy filing process.
Furthermore, the United States Securities Exchange Commission (SEC) expressed dissatisfaction with what it perceived as limited engagement and unprofessional conduct among several UCC members.
FTX’s restructuring unit has managed to recover around $7 billion in liquid assets from the original $8.7 billion owed to customers at the onset of the exchange’s bankruptcy proceedings.
READ MORE: PayPal’s Ethereum-Based Stablecoin PYUSD Divides Crypto Community
However, some creditors and experts believe that the debtors’ actions are hindering the reorganization process and have contested claims made by the UCC.
The debtors have unveiled a strategy for the relaunch of FTX 2.0, with CEO John J. Ray III striving to finalize agreements and outstanding payments to facilitate the launch.
Yet, Jesse Powell, the CEO of Kraken, has expressed doubt about FTX 2.0, stating that the endeavor is more challenging than starting anew.
Powell pointed to factors like the absence of a complete team, technology, necessary licenses, and damage to the brand’s reputation.
In a separate development, FTX has submitted a request for the dismissal of Chapter 11 bankruptcy proceedings involving FTX Exchange FZE (FTX Dubai).
The exchange argues that it never actually provided cryptocurrency-related services to investors, and therefore, the bankruptcy proceedings are not warranted.
Other Stories:
Governments Remain Wary About Worldcoin Amid Privacy Concerns
Binance’s Proof-of-Reserves Discloses Strong Financial Position
XRP Price Fails to Reach Anticipated Levels Despite Favorable Court Ruling
