Aftermath of the FTX Collapse

ChainCatcher news, FTX Trading Ltd. and its affiliated debtors announced that FTX is nearing the completion of the final prerequisites for the court-approved bankruptcy reorganization plan, paving the way for FTX to begin distributing compensation to creditors and customers. The effectiveness of the bankruptcy reorganization plan means that the court-approved reorganization plan officially begins implementation. This typically marks a critical step in the bankruptcy process, where the bankrupt company has reached agreements with creditors and other stakeholders and is prepared to proceed with actual debt repayment and asset distribution according to the plan.FTX provided the following update regarding the expected distribution timeline:In early December, the debtors expect to finalize arrangements with professional distribution agents who will assist FTX in distributing compensation to global customers within supported jurisdictions. At that time, the debtors will provide instructions to guide customers in establishing approved accounts on the existing customer portal.By the end of December, the debtors expect to announce the exact effective date after the court order approving the disputed claims reserve amount, which is a prerequisite for distribution according to the confirmation order.The debtors currently anticipate that the bankruptcy reorganization plan will become effective in early January 2025. According to the confirmation order, the first distributions will occur within 60 days after the effective date, targeting convenience class creditors allowed to claim under the plan. The record date for the initial distribution will be the same as the effective date.

ChainCatcher news, the liquidators of Three Arrows Capital (3AC) are attempting to amend their claim against FTX, increasing the claim amount from $120 million to $1.53 billion.The liquidators of 3AC claim that FTX liquidated and seized their assets on the platform two weeks before the hedge fund's collapse to settle a $1.33 billion debt. The hedge fund argues that these transactions were "avoidable and unfair," causing harm to 3AC's creditors. 3AC believes the liquidation should be invalidated, accusing FTX of undervaluing the transactions and breaching trust and contract.The bankrupt hedge fund also claims that FTX delayed providing necessary information, forcing 3AC to parse original data to calculate losses. As a result, 3AC states that it could only confirm the liquidation amount in August. However, FTX responded that an unnamed individual associated with 3AC initiated the asset liquidation. FTX has not identified this person. A court hearing will be held on November 20 to discuss 3AC's motion to amend the claim.

According to ChainCatcher news, as reported by Forbes, the bankruptcy estate of FTX has initiated 23 new lawsuits against institutions such as Binance, Anthony Scaramucci, SkyBridge Capital, Crypto.com, and even the lobbying group Fwd.us supported by Mark Zuckerberg, in an attempt to recover funds for creditors.These lawsuits allege that the funds transferred to these organizations were part of a larger "influence-buying campaign" orchestrated by FTX founder Sam Bankman-Fried. According to the legal documents, Bankman-Fried funneled money into political and traditional financial sectors through sponsorships, investments, and donations to enhance his reputation while concealing FTX's increasingly severe financial instability.The lawsuits claim that these expenditures provided "little to no benefit" to FTX or its creditors, primarily serving to maintain the illusion of financial stability as the company struggled with a significant gap in its balance sheet.

ChainCatcher news, according to Bloomberg, former Alameda Research co-CEO Sam Trabucco has agreed to transfer a range of assets, including a yacht, to FTX creditors.Trabucco purchased the 53-foot boat for $2.51 million in March 2022, just months before he left Alameda. According to a court document dated November 10, Trabucco also agreed to relinquish his legal ownership of two San Francisco apartments that he purchased for a total of $8.7 million in 2021.The document states that he also agreed to transfer all rights to approximately $70 million in claims made against FTX to the creditors, which will be dismissed.

ChainCatcher message, in response to Bloomberg's report on FTX's lawsuit to recover $1.8 billion, a Binance spokesperson stated: "These claims are baseless, and we will vigorously defend ourselves."

ChainCatcher news, FTX creditor Sunil stated on the X platform that FTX has filed a lawsuit to recover 27 million dollars from the Huobi and Poloniex accounts held by Alameda.

ChainCatcher news, according to The Block, former FTX user Alexander Nikolas Gierczyk has filed a lawsuit in the U.S. District Court for the Southern District of New York, accusing the hedge fund Olympus Peak of violating an agreement regarding additional bankruptcy claim proceeds. It is reported that Gierczyk transferred his bankruptcy claim worth $1.59 million to Olympus Peak at a 58% discount in November 2023.Recently, U.S. Bankruptcy Court Judge John Dorsey in Delaware approved the FTX asset restructuring plan. The plan is expected to repay FTX creditors between 129% and 146% of the claim value at the time of the bankruptcy filing in fiat currency. According to the lawsuit documents, based on this repayment ratio, Olympus Peak is expected to profit between $1.1 million and $1.4 million from Gierczyk's claim.The lawsuit documents indicate that although Gierczyk transferred the claim at a discount, the agreement with Olympus Peak included an "excess claim clause." This clause was originally intended to allow Gierczyk to receive additional compensation in the same proportion if the bankruptcy distribution exceeded expectations. However, the plaintiff's attorney stated that Olympus Peak has explicitly indicated it will not fulfill its obligations under this clause.

ChainCatcher news, according to TheBlock, the bankrupt cryptocurrency exchange FTX and the Commodity Futures Trading Commission (CFTC) have agreed to a $12.7 billion settlement, currently awaiting approval from a Delaware judge. The CFTC filed a fraud lawsuit against FTX, former CEO SBF, and its affiliate Alameda in 2022, claiming their actions led to $8 billion in customer losses.The CFTC initially sought $52.2 billion in claims. As part of the settlement agreement, the CFTC agreed not to seek any compensation as long as FTX adheres to the restructuring plan. FTX will pay creditors up to $12.7 billion in compensation, depending on available funds. A hearing on the settlement motion will be held on August 6.FTX filed for bankruptcy at the end of 2022. In May of this year, FTX's bankruptcy administrator announced a restructuring plan, under which creditors will receive full cash repayment. According to the plan, creditors with claims under $50,000 will be eligible for 118% compensation within 60 days after court approval.