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FTX US and JPLs working to reach agreement over access to FTX’s data

FTX’s US debtors, who are in Chapter 11 bankruptcy, and the joint provisional liquidators (JPL) who are overseeing the winding up of FTX Digital Markets (FTX DM) in The Bahamas are once again working to reach an agreement over access to the exchange’s data.

The JPLs and FTX’s new CEO John Ray III have exchanged blows in the last few weeks over the issue.

Ray has argued that the JPLs, along with the Securities Commission of The Bahamas (SCB) and the government of The Bahamas worked with former FTX CEO Sam Bankman-Fried to undermine the bankruptcy proceedings.

Ray also criticized the SCB’s decision to transfer hundreds of millions of dollars worth of FTX digital assets into a secure wallet controlled by the SCB in the days after FTX filed for Chapter 11 bankruptcy.

The SCB defended the decision, noting that it was done with the approval of the Supreme Court. It said it transferred $3.5 billion in assets to a digital wallet.

During a status hearing in a Delaware court yesterday, James Bromley, counsel for FTX’s US debtors said, “We have been in conversations over the past several days, notwithstanding the volume of papers that have been filed.

“We’ve also been trying to have conversations about moving forward on a constructive basis and based on communications that we’ve been having between our offices over the past several hours, I believe it is appropriate to inform the court that we would like additional time to reach an agreement and that we would not need to go forward on Friday with respect to the hearing on the motion to compel.”

Bromley asked that the parties meet next week.

“That would give us time to allow us to meet in person and see if we can come across the finish line with an agreement that would resolve most, if not all, of the issues that exist between the JPLs and the debtors,” he said.

Jason Zakia, who appeared on behalf of the JPLs, said his clients are hopeful.

“I agree with what Mr. Bromely said,” he said.

“We have been working in parallel paths and while there has been a fair bit of litigating, there has been negotiating.”

He added, “I think we are hoping to resolve this.”

On December 9, 2022, the liquidators filed an emergency motion asking US bankruptcy judge John T. Dorsey for access to certain electronic records related to FTX DM’s property and financial affairs. He set a hearing date of January 6, 2023.

Yesterday, Dorsey agreed to extend the hearing date to January 13, 2023 to allow FTX US and the JPLs to reach an agreement.

Bankman-Fried, the founder of FTX, was arrested in The Bahamas last month and extradited to the US on charges that he committed fraud at the company. He has denied the allegations. He is facing 115 years in prison.

SBF, as he is commonly known, moved FTX to The Bahamas in 2021.

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Travis Cartwright-Carroll

Travis Cartwright-Carroll is the news editor. He covers a wide range of national issues. He joined The Nassau Guardian in 2011 as a copy editor before shifting to reporting. He was promoted to news editor in January 2023.

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