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FTX Digital is an entity in the FTX group incorporated in the Bahamas. The FTX group was headquartered in and operated out of the Bahamas prior to its collapse. FTX Digital was licensed by the Securities Commission of the Bahamas (“SCB”) as a Digital Assets Business and was the principal licensed entity for the majority of products offered by the International (non-US) FTX.com platform. FTX Digital conducted customer onboarding, Know-Your-Customer checks, exchange operations, settlements and held customer fiat for the “FTX.com” or “FTX International” trading platform.

FTX Digital was placed into Provisional Liquidation following the lodgement of a Winding Up Petition by the SCB on 10 November 2022, just prior to the wider bankruptcy of the FTX Group in the US on 11 November 2022. A Winding Up Order was granted against FTX Digital by The Supreme Court of The Bahamas (the “Court”) on 10 November 2023 and the Joint Provisional Liquidators were appointed as Joint Official Liquidators (“JOLs”) at the same hearing. The duties of the JOLs are to wind up the assets of the business and return funds to customers and non-customer creditors.

The FTX group operated globally trading with more than one hundred entities. The FTX Digital liquidation is the Court-mandated process for the orderly liquidation of the FTX Digital operation and legal entity business in the Bahamas. 

Due to the poor internal record keeping and governance of the FTX group, there is not a clear perimeter between the assets and liabilities of FTX Digital, which is subject to an Official Liquidation process in the Bahamas (also known as the Bahamas Process), and FTX Trading Ltd, which is subject to a US Chapter 11 bankruptcy process (“the US Process”).

Following extensive review and analysis, the Liquidators of FTX Digital and FTX Trading Ltd and its affiliates as debtors in possession in the US Process (“US Chapter 11 Debtors”) have concluded that the assets and liabilities of the estates are so irreversibly intermingled that tracing is impossible.

Consequently, the Liquidators of FTX Digital and the US Chapter 11 Debtors have agreed to a Global Settlement Agreement, which among other things, contemplates pooling of assets from both estates so as to allow FTX.com customers to receive the same recoveries. The Settlement also allows the estates to coordinate asset realisations and distributions – allowing customers to lodge a claim in either the Bahamas Process or the US Process. Customers and non-customer creditors entitled to a distribution will receive substantially the same return at substantially the same time, regardless of the process they elect to make a claim in. Customers will be able to make a choice of opting into the Bahamas Process or claiming in the US Process.

The FTX Digital Claim Portal, under the Bahamas process, has been designed to enable creditors to view the balance of their holdings on the FTX.com trading platform, alongside the calculated claim values (at an 11 November 2022 reference date) and to lodge an electronic Proof of Debt form in one place. Furthermore, the FTX Digital Claim Portal has been designed to enable the transfer of claims between original customers and claim purchasers.

No, nothing prevents you from making a claim in multiple processes. However, creditors will only be paid a distribution from one of those processes with a procedure agreed for customers to elect which process they wish to follow. Those customers of FTX.com who have or will make a claim in both the US process and the Bahamas process will have the ability to formally elect to opt in to one or the other prior to the current scheduled Claim Bar Date. For any customers who have already submitted a claim in the US process but want to make a claim in the Bahamas process, you must positively opt in to the Bahamas process via either by submitting a Proof of Debt in the FTX Digital liquidation or making the election to opt into the Bahamas process by selecting the appropriate box in the voting process for the Chapter 11 process that will commence in the United States in due course in order to participate in the Bahamas process.

You may opt into either and will receive substantially the same level of distributions at substantially the same time (it is expected that distributions should be identical in either process).

Any customer or non-customer creditor who wishes to file a Proof of Debt may still do so up until the current scheduled Claim Bar Date.

The calculated claim values between the US Process and the Bahamas Process are expected to be substantially the same. The customer claim values set out in the FTX Digital Claim Portal are based on a value reference date of 11 November 2022 at 10:00am ET / 3:00pm UTC in accordance with an order made by the Supreme Court of the Bahamas dated 22 January 2024. The valuation rates are based on the digital assets conversion table adopted by the Chapter 11 process as sanctioned by the US Bankruptcy Court. Please note that by submitting your claim(s) to the Bahamas Process, your claim(s) will be adjudicated by the JOLs and either admitted or rejected for distribution. If admitted for distribution you will be notified of the admitted USD Claim value of your claims in due course. Note, the calculated claim values are based on the estimation motion at the petition date, which is subject to change.

Pursuant to the Order 8 rule 2(2) of the Chapter 308 Companies Liquidation Rules 2012 of the Statue Law of the Bahamas, the First Creditor’s Meeting was held in order to conduct a vote on the appointment of a liquidation committee. The First Creditor’s Meeting was held on 15 March 2024 at 10:30am EDT at Baha Mar Convention Center, 1 Baha Mar Blvd, Nassau, The Bahamas. 

Attendance at the First Creditors’ Meeting was not mandatory and does not impact the ability of a customer or non-customer creditor to submit a claim in due course and to establish their claim. Note, that submitting a “First Creditors’ Meeting Voting and Proof of Debt Form” does not automatically qualify you for a distribution.

Creditors who were unable to attend could still register to watch the virtual broadcast or could appoint a chairperson or an individual as their proxy to attend and vote in the First Creditors’ Meeting in person on their behalf.

Creditors could appoint the chair, or another individual as their proxy by filling in and submitting the First Creditor Meeting Voting and Proof of Debt form, which was to be submitted before 10 March 2024 at 5.00pm EDT. The JOLs took the opportunity to provide all creditors with an update on the liquidation at the meeting.

A claim can be made by submitting an electronic proof of debt form on the FTX Digital Claim Portal. The FTX Digital Claim Portal was launched in February 2024 and claims should be submitted prior to the current scheduled Claim Bar Date. After this point the JOLs will not accept any further claims in the FTX Digital estate.

The First Creditors’ Meeting Voting and Proof of Debt Form is solely for voting purposes in the First Creditors’ Meeting. This form is not for the purpose of adjudicating claims and qualifying customers or non-customer creditors for distributions. In order to avoid losing your entitlement to a distribution from the Bahamas Process, you are encouraged to submit a proof of debt form with your supporting documents on the claim portal website before the current scheduled Claim Bar Date. 

Customers and non-customer creditors should claim liabilities against the FTX Digital estate, including all outstanding principal and accrued but unpaid interest, incurred on or before the Valuation Date (i.e. 11 November 2022). Note, the calculated claim values are based on the estimation motion at the petition date, which is subject to change.

Creditors are at liberty to sell their claim(s) at any juncture and the new claim owners are advised to obtain all of the necessary information and/ or documents in order to corroborate the identity of the original owner of the claim. Prior to a distribution in either the US Process or the Bahamas Process, customers and non-customer creditors will be subject to Know-Your-Customer (“KYC”) checks. Holders of purchased claims will be subject to KYC checks themselves as well as in relation to the original claimant.