The cryptocurrency exchange FTX and its partner companies, which have applied for bankruptcy court protection in the United States, announced that the majority of their subsidiaries would begin paying salaries and benefits to employees around the world in the normal process.
The remedy consists of cash payments with regard to both the pre-petition and post-petition periods, within the bounds set by the Bankruptcy Court’s instructions.
Chief Executive John Ray in a statement said,
“I am glad that the FTX group is beginning ordinary course cash payments of salaries and benefits to our remaining workers around the world. The Court’s approval of our first day petitions and the work being done on global cash management.”
At the struggling cryptocurrency exchange’s first bankruptcy hearing last week, attorneys revealed ongoing issues like hacks and substantial missing assets while claiming that the insolvent exchange was governed as a “personal fiefdom” of former CEO Sam Bankman-Fried.
FTX collapse impacts to the Crypto industry
On November 11, FTX, its U.S. unit, cryptocurrency trading company Alameda Research, and almost 130 additional affiliates filed for bankruptcy protection in the United States.
The crash has stoked concerns about the cryptocurrency industry’s future, and numerous crypto BlockFi, a significant crypto lending and staking platform, declared bankruptcy on Monday.
The firm was one of FTX and Alameda’s several affiliates. In actuality, Alameda was BlockFi’s sibling hedge fund. The site froze all user withdrawals earlier this month, stating that a large portion of its investments and assets were tied to FTX.
Since then, the business has investigated a number of options, and its stakeholders have come to the conclusion that declaring bankruptcy is the only practical course of action. Other crypto Companies have been preparing for a fallout ever since.
BlockFi joined the lengthy list of crypto service companies who have been greatly affected by the collapse of the top exchange. Leading cryptocurrency brokerage firm Genesis also halted withdrawals and new loan applications shortly after the collapse. According to reports, the platform had to process more withdrawal requests than it had available cash.