
The payments will exclude former FTX CEO Sam Bankman-Fried, and certain former execs including Gary Wang, Nishad Singh, and Alameda's Caroline Ellison.
Bankrupt crypto exchange FTX has announced it will be “resuming ordinary” cash payments, salaries and benefits to its remaining employees around the world.
The announcement came from new FTX CEO John Ray III on Nov. 28, as the insolvency professional looks to help FTX and its approximated 101 affiliated companies (FTX Debtors) navigate their way through the U.S. Bankruptcy Court in Delaware.
"With the Court's approval of our First Day motions and the work being done on global cash management, I am pleased that the FTX group is resuming ordinary course cash payments of salaries and benefits to our remaining employees around the world.”
“FTX also is making cash payments to selected non-U.S. vendors and service providers where necessary to preserve business operations, subject to the limits approved by the Bankruptcy Court,” he added.
The announcement comes around 10 days after FTX debtors filed a motion to pay prepetition compensation and benefits to employees and contractors in the Delaware bankruptcy court on Nov. 19, which excludes payments to former FTX CEO and founder Sam Bankman-Fried, along with Gary Wang, Nishad Singh, and Caroline Ellison.
Sharing our press release just issued: FTX Resumes Ordinary Course Payments of Employees and Certain Foreign Contractors
— FTX (@FTX_Official) November 28, 2022
https://t.co/8CDnlsvu2j
The latest announcement will mean that the remaining employees and contractors of FTX will be receiving nearly three weeks' worth of pay, which was presumably halted after the company filed for bankruptcy on Nov. 11.
Ray acknowledged the financial hardship imposed on FTX employees and foreign contractors with the payment delay and thanked them for their support.
“We recognize the hardship imposed by the temporary interruption in these payments and thank all of our valuable employees and partners for their support."
The relief will include cash payments owed to workers at FTX Trading and 101 other affiliated companies since the Nov. 11 bankruptcy filing, in addition to the many vendors and service providers who still need to be paid out by FTX.
However, the resumption of payments won’t apply to all FTX subsidiaries and related companies.
In The Bahamas, where the crypto exchange is headquartered, only employees and contractors of the FTX Debtors will receive relief, but not those who worked for FTX Digital Markets, which is subject to a separate liquidation proceeding in The Bahamas.
It also won't apply to Australia-based employees and contractors for FTX Australia and its subsidiary FTX Express, which are also subject to separate proceedings in Australia.
Related: US House committee sets Dec. 13 date for FTX hearing
On Nov. 22, FTX Trading announced it had been granted interim and final approvals for all of the "First Day" motions for matters related to its bankruptcy filing on Nov. 11.
At the time, Ray said he expected the motions to fast-track FTX Debtor’s efforts to reimburse other stakeholders affected by the trading platform’s collapse, such as FTX users and creditors, with the new CEO suggesting that a potential buyout of FTX’s assets could benefit stakeholders sooner rather than later.
However, some insolvency lawyers warn that the process could take years, or even decades, given the complexity and scope of FTX’s collapse.
Insolvency lawyer Stephen Earel, partner at Co Cordis in Australia recently told Cointelegraph that it’ll take the courts several years, if not decades, to determine who owned what crypto assets before coming up with a plan to redistribute those funds.
FTX Trading alone owes its top 50 creditors $3.1 billion, according to a document submitted as part of its Chapter 11 bankruptcy proceedings.
It is understood that Sam Bankman-Fried and two former FTX associates are currently being detained by Bahamian authorities.
FTX former CEO Sam Bankman-Fried, co-founder Gary Wang and director of engineering Nishad Singh are understood to be in the Bahamas and are “under supervision” by the local authorities.
The source familiar with the matter told Cointelegraph that the three former FTX executives, as well as Alameda Research CEO Caroline Ellison, are looking for ways to flee to Dubai, which "doesn't have any extradition treaties" — likely in reference to the United States.
“Right now three of them, Sam, Gary, and Nishad are under supervision in the Bahamas. Which means it will be hard for them to leave,” a source familiar with the matter told Cointelegraph.
“I just got word that they were trying to get a way to get to Dubai which doesn’t have an extradition treaty.”
The source has also revealed that Ellison is currently in Hong Kong, “so she might be able to get to Dubai.”
A similar theory was discussed as part of a 16-hour-long Twitter Space hosted by Mario Nawfal, with a guest speaker claiming “trusted sources” have witnessed Bankman-Fried “in a locked space” with authorities in Albany Tower — a luxury resort located in New Providence in The Bahamas.
An unverified rumor also suggests that Bankman-Fried is currently joined by his father, Joseph Bankman.
Rumors that Bankman-Fried had been arrested on the tarmac at The Bahamas Airport made the rounds on Nov. 10 with evidence suggesting that Bankman-Fried’s private jet had been grounded for 40-minutes while on the way to Miami from Nassau.
On Nov. 12, rumors then pointed to Bankman-Fried having landed in Buenos Aires in the early hours of the day, after Twitter users tracked the coordinates of his private jet using the flight tracking website ADS-B Exchange.
Later in the day, Bankman-Fried in a text message to Reuters denied speculation that he had fled to Argentina, claiming that he was still in the Bahamas.
Related: FTX reportedly hacked as officials flag abnormal wallet activity
The former FTX CEO is at the center of one of the industry’s biggest scandals.
A report from The Wall Street Journal on Nov. 9 suggested that the U.S. Department of Justice and the Securities and Exchange Commission are investigating the collapse of the crypto exchange.
The Department of Financial Protection and Innovation (DFPI) in the state of California announced on Nov. 10 that it will open up an investigation as to the “apparent failure” of the exchange.
Approximately 130 companies in the FTX Group, including FTX Trading, FTX US, and Alameda Research started bankruptcy proceedings on Nov. 11.