Sam Bankman-Fried's Dramatic 10 Days
Bahamian liquidators and the U.S. team overseeing the bankrupt FTX crypto empire struck a deal to end most of their legal disputes, the two sides said Friday.
Under the proposal, the two sides will share information about the firm’s crypto assets, dispose of various properties owned by FTX units and cooperate to try to collect as much money as possible for creditors, according to a statement.
Since November, nearly all FTX divisions have been under the control of a U.S.-based group of restructuring professionals led by John J. Ray III, who helped oversee the bankruptcy case of energy trading giant Enron. One unit was put under control of liquidators in the Bahamas, who have worked closely with island securities regulators.
The two teams have squabbled since FTX collapsed amid fraud allegations made against founder Sam Bankman-Fried and some of his partners. Earlier this week, Bankman-Fried pleaded not guilty to criminal charges in federal court in New York.
Under the cooperation agreement, liquidators in the Bahamas will take the lead on disposing of real estate in the Bahamas, where FTX was in the midset of a building spree before it collapsed. Any sales or other transactions involving the property will be jointly overseen by courts in the U.S. and the Bahamas.
The two sides have also agreed on a process to confirm what digital assets came under the control of the Securities Commission of The Bahamas when regulators there seized some FTX assets.
A U.S. judge must approve the deal before it can be fully implemented.
In the weeks after the bankruptcy, the U.S. team accused the Bahamian liquidators and island securities commissioners of violating U.S. bankruptcy rules by grabbing FTX assets that were being overseen by a federal judge. Those allegations were expected to play a key part in an upcoming court hearing to determine how much deference, if any, the U.S. should give to liquidators in the Bahamas.
The case is FTX Trading Ltd., 22-11068, U.S. Bankruptcy Court for the District of Delaware.