TL;DR
- FTX Digital Markets extends the deadline for creditor claims, allowing more time to present proof of debt.
- The deadline for submitting the Proof of Debt in the Bahamas is extended until the end of July or August.
- Concerns about the process of distributing refunds to customers and creditors following FTX’s promise to refund cash within a specific time frame.
FTX Digital Markets has decided to extend the deadline for creditors to file their claims, in an effort to give them enough time to present evidence of debt.
The extension particularly affects the deadline for submitting the Proof of Debt in the Bahamas, which is now expected until the end of July or August, as reported by Sunil, an FTX creditor activist.
FTX claims
Bahamas Bar date extended 10-12weeks:
End of July/August pic.twitter.com/HadnXKrDvI
— Sunil (FTX Creditor Champion) (@sunil_trades) May 15, 2024
FTX’s move to refund cash to its creditors and customers within 60 days of court approval has generated mixed opinions.
While some members of the crypto community have greeted this promise with optimism, others express concerns about the effectiveness and transparency of the fund distribution process.
FTX clients in bankruptcy have the option of participating in the Bahamian or US legal process.
These separate legal proceedings are designed to meticulously address the fallen platform’s extensive financial obligations, ensuring that each creditor’s claim is thoroughly evaluated and processed.
The intricate nature of these proceedings aims to create a structured and equitable framework for the resolution of debts, considering the varied interests and stakes of all involved parties.
The choice between the Bahamas and U.S. processes will be determined based on specific conditions that will be communicated to customers over the next month.
Customers will have a period of 6 to 8 weeks to review these conditions and make an informed decision about which process best suits their situation.
This timeframe allows customers to carefully consider the implications of each legal avenue and choose the one that aligns with their individual needs and circumstances.
FTX case have drawn comparisons with other notable situations, such as the Cryptopia case
The Cryptopia case, under New Zealand and UK law, treated each type of asset as a separate entity, which provided a precedent for dealing with similar challenges in asset distribution.
Analysts have noted that applying similar principles could potentially streamline the resolution process for FTX’s creditors.
Concerns about insufficient funds to cover all claims remain a significant issue.
These concerns stem from discrepancies between the listed assets and the actual balances at the time of the bankruptcy filing.
Some analysts suggest looking to past cases to find effective solutions in asset distribution, proposing that each asset category be handled separately to ensure a fair allocation of remaining funds.
The extension of the claims deadline, along with ongoing concerns about the equitable distribution of refunds, underscores the critical importance of transparent and efficient management in bankruptcy situations.
