The beleaguered FTX International exchange is still trying to keep its head above water. His latest move was to reassure some employees and affiliates that they will still get paid.
On November 28, FTX Trading Ltd. (FTX.com’s parent company) said it was “resuming normal salary and benefit payments.” He added that this included 101 additional affiliates, otherwise known as his debtors.
Global employees and “certain non-US contractors and service providers” would see a resumption of payments in the normal course of things.
The move does not affect any personnel or companies affiliated with FTX.US.
Bahamas and Australia excluded
Newly appointed CEO John Ray said the payments came with court approval of his day one motions. He added that work was underway on overall cash management.
Payments were made “subject to limits approved by the bankruptcy court”, he added. The relief also includes cash payments which are subject to the limits imposed from the date of filing for bankruptcy.
However, there are a few jurisdictions that will be excluded. In the Bahamas, only employees or contractors of FTX Debtors will be paid. Employees or contractors of FTX Digital Markets Ltd. (FTXDM Bahamas) are not included as they are subject to a different liquidation procedure and not Chapter 11.
Likewise with Australia, since FTX Australia Pty Limited and FTX Express Pty Ltd were separate entities not included in US Chapter 11.
The announcement follows a petition filed by FTX debtors on Nov. 19 for payment or pre-petition of compensation and benefits to employees and contractors.
The payouts exclude former FTX CEO and founder Sam Bankman-Fried and executives Gary Wang, Nishad Singh and Caroline Ellison.
Those who are eligible will receive nearly three weeks’ pay, which was suspended with the November 11 bankruptcy filing.
Last week, John Ray suggested that a potential sale of FTX assets could benefit stakeholders sooner rather than later. However, insolvency lawyers think it could be a long and drawn-out affair.
The FTX Contagion Continues
The latest victim of the FTX contagion is crypto lender BlockFi. On November 28, BlockFi became the latest crypto firm to file for Chapter 11 bankruptcy, as reported by BeInCrypto.
According to the filing, the company has $257 million in cash to continue internal operations during the restructuring.
Silvergate Capital has also been implicated, as several industry watchers said they lent money to BlockFi. However, the crypto bank refuted these claims in a Nov. 28 announcement when it revealed the exposure was limited to $20 million.
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