FTX Pledges to Continue Paying Non-US Employees and Contractors

29 November 2022, 05:57 GMT+0000
Updated by Kyle Baird
29 November 2022, 05:57 GMT+0000
In Brief
  • FTX International employees will get their backpay.
  • Non-US contractors are included, but not in the Bahamas or Australia.
  • BlockFi becomes latest victim of the FTX contagion.
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The beleaguered FTX International exchange is still trying to keep its head above water. Its latest move has been to reassure some staff and subsidiaries that they’ll still get paid.

On Nov. 28, FTX Trading Ltd. (the parent company of FTX.com) stated that it was “resuming ordinary course payment of salary and benefits.” It added that this included 101 additional affiliated companies, otherwise known as its debtors.

Global employees and “certain non-U.S. contractors and service providers,” would see a resumption of ordinary course payments.

The move does not affect any staff or companies affiliated with FTX.US.

Bahamas and Australia Excluded

Newly appointed CEO, John Ray, said that the payments come with the court’s approval of its First Day motions. He added that work was being done on global cash management.

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The payments were being made “subject to the limits approved by the Bankruptcy Court,” he added. The relief also includes cash payments which are subject to those limits imposed on or after the bankruptcy filing date.

However, there are a couple of jurisdictions that will be excluded. In the Bahamas, only employees or contractors of FTX debtors will be paid. Employees or contractors of FTX Digital Markets Ltd. (FTXDM Bahamas) are not included since it is subject to a different liquidation proceeding and not Chapter 11.

Likewise with Australia, since FTX Australia Pty Limited and FTX Express Pty Ltd were separate entities not included in the U.S. Chapter 11.

The announcement follows a motion filed by FTX debtors on Nov. 19 for payment or pre-petition compensation and benefits to employees and contractors.

The payments exclude former FTX CEO and founder Sam Bankman-Fried and executives Gary Wang, Nishad Singh, and Caroline Ellison.

Those that are eligible will receive almost three weeks of pay which was suspended with the bankruptcy filing on Nov. 11.

Last week John Ray suggested that a potential sale of FTX assets could benefit stakeholders sooner rather than later. However, insolvency lawyers think it could be a long, drawn-out affair.

FTX Contagion Continues

The latest victim of the FTX contagion is crypto lender BlockFi. On Nov. 28, BlockFi became the latest crypto firm to file for Chapter 11 bankruptcy, as reported by BeInCrypto.

According to the filing, the firm has $257 million in liquidity to continue internal operations during the restructuring.

Silvergate Capital has also been implicated, as several industry observers said it had lent money to BlockFi. However, the crypto bank refuted these claims in an announcement on Nov. 28 when it revealed that exposure was limited to $20 million.

Disclaimer

BeInCrypto has reached out to company or individual involved in the story to get an official statement about the recent developments, but it has yet to hear back.