FTX's debtors have clashed with the Official Committee of Unsecured Creditors (UCC) over the control of the asset of the collapsed cryptocurrency exchange. The disagreement has been complicated by plans to relaunch the exchange's operations outside the US.
The FTX's debtors, led by the Chief Restructuring Officer, John Ray III, have disputed a recommendation by UCC to invest USD $2.6 million in short-term Treasuries from the exchange's cash reserves. According to a court document filed yesterday (Wednesday), the debtors are arguing that this step will affect the proposed relaunch of FTX.
FTX Debtors vs. UCC
Additionally, FTX's debtors have responded to UCC's recommendation to allocate a significant sum of cash reserves amounting to USD $330 million to cover professional fees. The exchange's debtors argue that there was insufficient consultation and much of the company's funds were depleted when the company sought bankruptcy protection last November.
"The committee complains about the debtors' failure to invest in treasury securities, but ignores that such a strategy would require relief from this court given that the debtors' cash is collateralized by 115% under section 345 of the Bankruptcy Code," the court document explained.
Amid the legal tussle, the Securities and Exchange Commission (SEC) has reiterated the concerns over the limited consultations and the alleged unprofessional behavior exhibited by certain members of the UCC, according to a report by Cointelegraph. So far, FTX's restructuring team has recovered USD $7 billion out of USD $8.7 billion believed to have been misappropriated by the former executives of the exchange.
FTX 2.0
More than a week ago, Finance Magnates reported that FTX had proposed a plan to relaunch the exchange outside the US in collaboration with third parties. Thus, FTX has categorized claimants of the defunct exchange into distinct groups. One of the groups is the claimants of FTX.com, the offshore exchange, which has been labeled as 'dotcom customers'.
The 'dotcom' claimants have been presented with an opportunity to contribute their assets towards the establishment of the offshore exchange. The proposal states that the claimants will forgo their entitlement to receive cash compensation and will receive shares in the new exchange instead.
This article was written by Jared Kirui at www.financemagnates.com.
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