Understanding FTX's Clarification on Backpack's Claims

FTX Provides Clarity on Backpack's Recent Statements

Recently, FTX Trading Ltd., also known as FTX.com, took steps to clarify misleading statements made by Backpack regarding the alleged acquisition of FTX EU Ltd. Although Backpack claimed to have obtained FTX EU, FTX denies any involvement. This situation raises concerns regarding the monetary obligations owed to former customers of FTX EU.

FTX's Ownership and Bankruptcy Proceedings

Currently, FTX Europe AG, a subsidiary of FTX, retains complete ownership of FTX EU. This means that the process of transferring shares to individuals within former leadership has not yet been finalized. Consequently, Backpack's recent claims about the acquisition lack authenticity.

Bankruptcy Court's Role

The U.S. Bankruptcy Court, which oversees these proceedings, has not sanctioned Backpack's acquisition of FTX EU. Earlier agreements stated that the FTX Debtors would transfer ownership to former insiders in connection with a settlement approach. It’s important to note that FTX itself was not informed of any indirect sale to Backpack until very recently. This revelation brings significant scrutiny to the matters at hand.

Responsibilities Toward Customers

In addressing customer concerns, it is critical to assert that Backpack has not been authorized by FTX to make any distributions to either customers or creditors, including those who previously engaged with FTX EU. All responsibilities regarding the return of customer funds rest solely with FTX EU itself.

Implications for Creditors

Regarding obligations owed to FTX EU's former customers, FTX emphasizes that no determinations will be made by either FTX or the U.S. Bankruptcy Court on those amounts. Rather, this responsibility falls solely on FTX EU, particularly once a sale concludes. FTX clearly states that it will not be accountable for repayments owed by FTX EU and disclaims any responsibilities in this regard.

Communication from FTX

Furthermore, FTX has not verified or endorsed any information shared by Backpack in relation to asset recovery for former customers of FTX EU. This lack of approval raises questions about the authenticity of Backpack's communications. FTX has reiterated that it cannot vouch for the accuracy of statements made by Backpack.

Ongoing Recovery and Distribution Process

FTX’s reorganization plan through the U.S. Bankruptcy Court came into effect, marking a pivotal moment in the recovery process for creditors. As everyone navigates these turbulent waters, it is crucial for affected individuals to stay informed about the upcoming distributions stipulated in the approved plan.

Legal and Financial Advising

In these complex legal situations, the FTX Recovery Trust is supported by an experienced team, including Sullivan & Cromwell LLP as legal counsel and Alvarez & Marsal North America, LLC, as financial advisors. The collective expertise of these firms aims to ensure a clear pathway through this recovery process.

Frequently Asked Questions

What clarification did FTX provide regarding Backpack?

FTX clarified that Backpack's claims about acquiring FTX EU are misleading and unauthorized, emphasizing Backpack's lack of involvement in the bankruptcy process.

Who is responsible for customer fund repayment?

FTX has stated that FTX EU is solely responsible for repaying any funds owed to its former customers, and FTX itself will not handle these repayments.

Was the acquisition by Backpack approved?

No, the U.S. Bankruptcy Court has not approved the acquisition by Backpack, adding to the confusion surrounding these claims.

What are the next steps for creditors?

Creditors should stay attentive to the developments of the reorganization plan approved by the U.S. Bankruptcy Court, which is expected to outline the process for distributions.

Is Backpack responsible for communicating with FTX customers?

Backpack has not been authorized to communicate or make any distributions to FTX customers, and FTX advises customers to disregard statements from Backpack.

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