FTX stated in a court filing that the US government’s demands would likely reach $5 billion. The filing reveals ongoing negotiations and suggests the final numbers are likely to change. Management plans to use SDNY Remission Proceeds primarily to compensate customers and lenders. FTX CEO John J. Ray III disputes Sam Bankman-Fried’s claims.
US government demands will likely increase!
Bankrupt cryptocurrency exchange FTX stated in a court filing that the US government’s demands could total between $3 billion and $5 billion. This update comes from documents filed with the United States District Court for the Southern District of New York. The filing underscores ongoing negotiations with officials. It also shows that the final figure is subject to change. FTX’s approach aims to manage government and tax demands efficiently. It also aims to provide a streamlined process for asset distribution.
The court document focuses on the top priorities during Chapter 11 bankruptcy proceedings. The organization’s preliminary statement states that it will meet the needs of FTX customers and Alameda Research lenders. Additionally, it indicates that he will pay administrative expenses and government and tax claims later.
FTX plans full SDNY revenue for clients
The plan calls for 100% of the SDNY Remission Proceeds to be allocated to FTX.com creditors and Alameda lenders. This application requires a solution with organizations such as BlockFi. This reinforces the property’s focus on compensating customers and lenders first. After deducting administrative expenses and claims from other non-government creditors, the balance of the assets will be due up to 25 percent of the principal value in U.S. Federal income tax claims. The balance of the funds will be directed to the Civil Remission Fund, which is intended for creditors who have observed an increase in the value of their virtual currency assets since the moment they filed for bankruptcy.
This distribution strategy symbolizes the estate’s attempt to harmonize the interests of all parties involved. FTX prioritizes customers and lenders to demonstrate FTX’s commitment to mitigating the effects of bankruptcies. Therefore, it provides a means of recovery for fair rewards. In this regard, it established a Civil Remission Fund to counter the volatility of crypto assets.
John J. Ray III disputes Sam Bankman-Fried’s claims
While FTX continues its bankruptcy proceedings, it reported that it has made significant progress in asset recovery. In a filing filed in September 2023, FTX stated that it had recovered approximately $7 billion of its assets. This figure is likely to increase with the recent upward trend in cryptocurrency markets. This recovery is of critical importance in order to fulfill its obligations to stakeholders.
The legal basis for FTX’s bankruptcy includes the conviction of its former CEO, Sam Bankman-Fried, for defrauding users and investors. In contrast, current CEO John J. Ray III criticizes Sam Bankman-Fried’s allegations of customer harm. The CEO highlights the complexities surrounding FTX’s collapse and ongoing recovery efforts. Accordingly, the CEO wrote a letter to U.S. District Judge Lewis Kaplan. Ray III calls SBF’s claims “absolutely disrespectful and patently false.” In this regard, Ray says the following:
SBF continues to live a life of illusion. The ‘job’ he left on November 11, 2022 was neither solvable nor safe. Bankman-Fried stole large amounts of money and was correctly convicted by a jury.
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