Bankrupt crypto exchange FTX has announced it will be “resuming ordinary” cash payments, salaries and benefits to its remaining employees around the world.
The announcement came from new FTX CEO John Ray III on Nov. 28, as the insolvency professional looks to help FTX and its approximated 101 affiliated companies (FTX Debtors) navigate their way through the U.S. Bankruptcy Court in Delaware:
“With the Court’s approval of our First Day motions and the work being done on global cash management, I am pleased that the FTX group is resuming ordinary course cash payments of salaries and benefits to our remaining employees around the world.”
“FTX also is making cash payments to selected non-U.S. vendors and service providers where necessary to preserve business operations, subject to the limits approved by the Bankruptcy Court,” he added.
The announcement comes around 10 days after FTX debtors filed a motion to pay prepetition compensation and benefits to employees and contractors in the Delaware bankruptcy court on Nov. 19, which excludes payments to former FTX CEO and founder Sam Bankman-Fried, along with Gary Wang, Nishad Singh and Caroline Ellison.
Sharing our press release just issued: FTX Resumes Ordinary Course Payments of Employees and Certain Foreign Contractors— FTX (@FTX_Official) November 28, 2022
The latest announcement will mean that the remaining employees and contractors of FTX will be receiving nearly three weeks’ worth of pay, which was presumably halted after the company filed for bankruptcy on Nov. 11.
Ray acknowledged the financial hardship imposed on FTX employees and foreign contractors with the payment delay and thanked them for their support:
“We recognize the hardship imposed by the temporary interruption in these payments and thank all of our valuable employees and partners for their support.”
The relief will include cash payments owed to workers at FTX Trading and 101 other affiliated companies since the Nov. 11 bankruptcy filing, in addition to the many vendors and service providers who still need to be paid out by FTX.
However, the resumption of payments won’t apply to all FTX subsidiaries and related companies.
In the Bahamas, where the crypto exchange is headquartered, only employees and contractors of the FTX Debtors will receive relief, but not those who worked for FTX Digital Markets, which is subject to a separate liquidation proceeding in the Bahamas.
It also won’t apply to Australia-based employees and contractors for FTX Australia and its subsidiary FTX Express, which are also subject to separate proceedings in Australia.
On Nov. 22, FTX Trading announced it had been granted interim and final approvals for all of the “First Day” motions for matters related to its bankruptcy filing on Nov. 11.
At the time, Ray said he expected the motions to fast-track FTX Debtor’s efforts to reimburse other stakeholders affected by the trading platform’s collapse, such as FTX users and creditors, with the new CEO suggesting that a potential buyout of FTX’s 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 scope of FTX’s collapse.
Insolvency lawyer Stephen Earel, partner at Co Cordis in Australia, recently told Cointelegraph that it’ll take the courts several years, if not decades, to determine who owned what crypto assets before coming up with a plan to redistribute those 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.