The embattled cryptocurrency exchange FTX and attached firms have disclosed that employee salary payments and benefits will begin once again after it was halted when the company filed for bankruptcy.
Former CEO Sam Bankman-Fried and other top executives, including Gary Want, Nishad Singh, and Caroline Ellison, will not be on the payroll.
The new CEO— John Ray III, revealed on the 28th of November that the bankrupt exchange would start paying employees salaries and benefits to its remaining universal employees—a relief for the employees who were left devastated after the company announced its file for bankruptcy.
John— the experienced insolvency specialist, seeks to help the exchange and its affiliated companies through the bankruptcy proceedings. He stated,
“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 regular course cash payments of salaries and benefits to our remaining employees around the world. The company is also 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.”
The announcement comes around ten 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.
FTX Announcement— a solace for employees
The announcement comes as a relief for the employees as they will go ahead to receive three weeks’ pay. The pay stopped after the official release that the exchange filed for bankruptcy on the 11th of November.
The new CEO acknowledged the struggles inflicted on the contractors and employees and appreciated their efforts in staying calm and reserved while the bankruptcy proceedings began. John said,
“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 properties of the relief will include cash payments owed to employees of the cryptocurrency exchange and roughly 101 affiliated trading firms since the bankruptcy filing made the airwaves. In addition, it will also include payments to be processed to vendors and service providers.
Others still await
The recommencement of payments and salaries only applies to some offshoots and other affiliated companies. For instance, in the Bahamas, only the employees of FTX debtors will be permitted to receive a salary.
Nonetheless, those employees currently working for FTX Digital Markets will not be eligible to collect any. This is because FTX Digital Markets are under different liquidation proceedings in the Bahamas, where the cryptocurrency exchange headquarter is situated.
Also, Australia-based employees and contractors for FTX Australia and its subsidiary, FTX Express, will not be eligible to receive any relief. Both are subject to different bankruptcy proceedings ongoing in Australia.
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 users and creditors, with the new CEO suggesting 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 the exchange’s collapse.
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