FTX resumes paying staff and contractors after weeks in limbo

Bankrupt crypto exchange FTX has announced that it will “resume” regular cash payments, salaries and benefits for its remaining employees worldwide.

The announcement came from new FTX CEO John Ray III on Nov. 28, as the insolvency practitioner seeks to help FTX and its approximately 101 affiliates (FTX Debtors) navigate their way through court. American of Delaware bankruptcies.

“With the Court’s approval of our day one motions and work being done on overall cash management, I am pleased that FTX Group is resuming regular cash payments of salaries and benefits to our remaining employees in the world.”

“FTX also makes cash payments to certain non-U.S. 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 compensation and pre-petition benefits to employees and contractors in Delaware bankruptcy court on Nov. 19, which excludes payments to former FTX CEO and Founder Sam Bankman-Fried, as well as Gary Wang. , Nishad Singh and Caroline Ellison.

The latest announcement will mean remaining FTX employees and contractors will receive nearly three weeks of pay, which was presumably cut short after the company filed for bankruptcy on November 11.

Ray acknowledged the financial hardship imposed on FTX employees and foreign contractors with the late payment and thanked them for their support.

“We recognize the difficulties imposed by the temporary suspension of these payments and 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 affiliates since the Nov. 11 bankruptcy filing, in addition to the many vendors and service providers who have yet to be paid by FTX.

However, the resumption of payments will not apply to all subsidiaries and related companies of FTX.

In the Bahamas, where the crypto exchange is headquartered, only employees and contractors of FTX debtors will receive relief, but not those who worked for FTX Digital Markets, which is undergoing liquidation proceedings. distinct in the Bahamas.

It will also not apply to Australia-based employees and contractors for FTX Australia and its subsidiary FTX Express, which are also subject to separate proceedings in Australia.

Related: US House committee sets December 13 date for FTX hearing

On November 22, FTX Trading announced that it had obtained interim and final approvals for all “day one” motions for matters related to its November 11 bankruptcy filing.

At the time, Ray said he expected the motions to expedite FTX Debtor’s efforts to reimburse other stakeholders affected by the trading platform’s collapse, such as users and creditors of FTX, with the new CEO suggesting that a potential takeover of FTX assets could benefit stakeholders. sooner rather than later.

However, some insolvency lawyers warn that the process could take years or even decades, given the complexity and scale of FTX’s collapse.

Insolvency lawyer Stephen Earel, a partner at Co Cordis in Australia, recently told Cointelegraph that it would take several years, if not decades, for the courts to determine who owned which crypto assets before coming up with a plan to redistribute the crypto assets. these funds.

FTX Trading alone owes its top 50 creditors $3.1 billion, according to a document submitted as part of its Chapter 11 bankruptcy proceedings.