The legal teams helming troubled crypto exchange FTX’s bankruptcy cases in the United States and the Bahamas reached a mutual cooperation agreement, appearing to end, for now, the disagreements between the two parties that had surfaced shortly after FTX collapsed.
Parallel FTX bankruptcies are unfolding in Delaware, where the firm filed for Chapter 11 bankruptcy protection, and the Bahamas, where FTX Digital Markets is based. The crypto behemoth filed for bankruptcy protection in November and could owe $3.1 billion to its 50 largest creditors.
The FTX debtors and the firm’s joint provisional liquidators have agreed on terms for involving one another in legal proceedings in each jurisdiction, they said in a statement.
“Under the cooperation agreement, the parties commence work together to share information, secure and return property to their estates, coordinate litigation against third parties and explore strategic alternatives for maximizing stakeholder recoveries,” FTX said in a statement.
Both parties are “comfortable” that digital assets have been safeguarded by the Bahamian Securities Commission and agreed on a process to confirm inventory under its control.
Although the legal teams have made progress, FTX CEO John Ray III hinted that there are still some areas of disagreement. “There are some issues where we do not yet have a meeting of the minds, but we resolved many of the outstanding matters and have a path forward to resolve the rest,” he said.
The agreement is subject to court approval by the U.S. Bankruptcy Court in Delaware and the Supreme Court of the Bahamas. The next FTX court proceeding in Delaware is scheduled for Jan. 13.
Disclaimer: Beginning in 2021, Michael McCaffrey, the former CEO and majority owner of The Block, took a series of loans from founder and former FTX and Alameda CEO Sam Bankman-Fried. McCaffrey resigned from the company in December 2022 after failing to disclose those transactions.
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