The bankrupt cryptocurrency exchange FTX has announced that it will resume ordinary cash payments, salaries, and benefits to its remaining employees worldwide.

On Nov. 28, new FTX CEO John Ray III made the announcement, as the insolvency professional looks to help the platform and its estimated 101 related entities (FTX Debtors) navigate their way through the U.S. Delaware Bankruptcy Court.

"I am pleased that, with the Court's approval of our First Day motions and the work that is being done on global cash management, the FTX group is going to resume ordinary course cash payments of wages and benefits to our remaining employees around the world."

"The platform also makes cash payments to selected non-U.S. vendors and service providers as needed to preserve business operations, subject to the Bankruptcy Court's approval," he added.

The announcement comes roughly 10 days after FTX debtors filed a request in the Delaware bankruptcy court on Nov. 19 to pay prepetition benefits and compensation to employees and contractors, which exempts payments to former CEO and founder Sam Bankman-Fried, as well as Gary Wang, Nishad Singh, and Caroline Ellison.

The latest announcement means that the remaining employees and contractors will receive nearly three weeks' pay, which was assumedly halted after the company declared bankruptcy on Nov. 11.

Ray acknowledged the financial hardship caused by the payment delay and thanked them for their assistance.

The assistance will include cash payments due and owing to workers at FTX Trading and 101 other related entities since the bankruptcy filing on November 11, as well as many vendors and service providers who have yet to be paid by FTX. However, payments will not be resumed for all subsidiaries and related companies.

Only employees and contractors of the FTX Debtors will receive relief in The Bahamas, where the crypto exchange is headquartered, not those who started working for Digital Markets, which is subject to a completely separate liquidation proceeding.

It will also not apply to employees and contractors based in Australia and its subsidiary FTX Express, which are also subject to separate proceedings in Australia.

On November 22, FTX Trading announced that it had received interim and final approvals for all "First Day" motions linked to its bankruptcy filing on November 11.

Ray stated at the time that he expected the motions to expedite the Debtor's efforts to pay back other stakeholders affected by the trading platform's demise, such as users and creditors, with the new CEO implying that a potential buyout of assets could profit stakeholders sooner rather than later.

Given the complexity and scope of FTX's collapse, some bankruptcy law lawyers warn that the process can take years, if not decades.

Insolvency lawyer Stephen Earel, the partner at Co Cordis in Australia, recently told that it will take the court system several years, if not decades, to determine who purchased what crypto assets before devising a plan to redistribute those funds.

According to a document filed as part of the company's Chapter 11 bankruptcy proceedings, FTX Trading alone owes $3.1 billion to its top 50 creditors.

What do you think of FTX's decision to resume payments? Let us know your thoughts by sharing this article online.

Nov 29, 2022
Crypto News

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