Deniz 
From relaunching the FTX exchange in order to generate money back for creditors to issuing claims as tokens in a new enterprise that can be exchanged, many various paths have been investigated or suggested to maximize creditor recovery during the FTX bankruptcy.
In a move one crypto CEO described as “one of the most crypto things” he has seen, certain distributed markets such Found.xyz and Figure Markets even started supporting tokenized FTX claims trading this summer.
Claiming no investors would provide the funds needed to spin the offshore market back up again, FTX, under the direction of CEO John Ray III and legal counsel Sullivan & Cromwell, rejected the notion of restarting the exchange. FTX’s present strategy is to pay creditors back in cash—or U.S. dollar pegged stablecoins—even though certain creditors have demanded in-kind distributions—that is, repaying lost crypto in crypto rather than in cash as in the BlockFi and Genesis bankrupties.
The Securities and Exchange Commission has just cautioned FTX in a recent filing that it reserves the right to contest the legality of paying back claims or otherwise trying to generate money from its cache of “crypto asset securities.” Should that clause be authorized, the SEC’s filings also highlight that the plan does not define who would disperse the stablecoins.
Writing, “The SEC is not opining as to the legality, under the federal securities laws, of the transactions outlined in the Plan,” the agency notes, “reserves its rights to challenge transactions involving crypto assets.” The SEC did not state outright that such an action would be illegal.
The SEC also objected to a discharge clause in the plan that would cover the FTX debtors from future legal actions by creditors, so joining the U.S. Trustee supervising the bankruptcy. Citing the pertinent law, the U.S. Trustee said in his submission, “unless the Plan provides that the Debtors shall not receive a discharge and removes any discharge injunction, the Court should deny confirmation.”
A calculation by X user Mr. Purple shows that the administrative cost of FTX’s insolvency has skyrocketed in the time since the exchange collapsed; fees demanded by its staff lately exceeded $800 million.
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