The Chapter 11 case: filing, recoveries, lawsuits and the plan

analysisFTX Trading Ltd. and its affiliates filed voluntary Chapter 11 petitions in the U.S. Bankruptcy Court for the District of Delaware on 11 November 2022, and West Realm Shires Inc. on 14 November, in what Ray called a severe liquidity crisis that required filing on an emergency basis. The court authorised joint administration under FTX Trading's case number, 22-11068, on 22 November 2022, and the U.S. Trustee appointed an Official Committee of Unsecured Creditors on 15 December 2022; FTX Digital Markets' liquidators described the filings as covering FTX Trading and 133 affiliates. The case was administered by Judge John T. Dorsey, and its number later carries the initials of Chief Judge Karen B. Owens. ^{1 2 3 4 5 6 7}

analysisThe claims agent's case list gives each debtor its own number, from Alameda Research LLC (22-11066) and Alameda Research Ltd (22-11067) through FTX Japan Holdings, FTX Europe AG, Paper Bird Inc and many FTX Trading subsidiaries to Quoine Pte Ltd (22-11161), FTX EU Ltd. (22-11166) and West Realm Shires Inc. (22-11183). According to the debtors' disclosure statement, at their request the court later dismissed the cases of SNG Investments and FTX Turkey in February 2023, FTX Exchange FZE in August 2023, Liquid Financial USA, LiquidEX, Zubr Exchange and DAAG Trading, DMCC in November 2023, seven more companies, including FTX Products (Singapore), Quoine Vietnam, Innovatia and Quoine India, together with two Alameda subsidiaries, on 19 April 2024, and FTX Switzerland, FTX Certificates and FTX Structured Products from 10 May 2024; the disclosure statement leaves the date for FTX Trading GmbH and FTX EU Ltd. blank. ^{8 9}

analysisRay stated that apart from the Bahamian and Australian proceedings no group company was then in insolvency proceedings elsewhere. In the first hours of 11 November 2022 the directors of the non-debtors FTX Australia Pty Ltd and FTX Express Pty Ltd appointed Scott Langdon, John Mouawad and Rahul Goyal of KordaMentha as voluntary administrators; a notice published by the Australian Securities and Investments Commission called the second creditors' meeting for 14 March 2024, whose result was not retained. In the Bahamas, Kurt Knipp was recognised as foreign representative of FTX Trading Ltd. and six other debtors by a declaratory order of 23 February 2023. ^{4 10 11}

analysisTo value customer claims in tokens the debtors largely controlled, the court in June 2024 discounted the market prices of MAPS, OXY and SRM by 100%, 99.9% and 18.6%, noting that the debtors held more than 99%, 97% and 95% of their supply. Among asset sales, Clifton Bay Investments' stake in a Sequoia Capital fund was sold for about $45 million in March 2023, and FTX Ventures agreed in January 2024 to sell a $100 million Dave Inc. convertible note back to Dave for $71 million plus a possible further payment. Alameda Research Ltd. and FTX Trading sued Voyager Digital to recover preferential loan repayments and withdrawals; after Voyager had reserved $445 million for the claims, the two estates settled all claims between them in April 2024. ^{1 2 3}

analysisThe claims agent lists the adversary proceedings: suits by FTX Trading, alone or with other debtors, against Lorem Ipsum UG, LayerZero Labs, Mirana Corp., Ryan Salame, Genesis Block, SkyBridge Capital II and a series of political and advocacy organisations; suits by Alameda companies against Voyager Digital, FTX Digital Markets, Michael Giles and others, Bankman-Fried and Daniel Friedberg; actions by the FTX Recovery Trust, including one against Salame and others; and Melamed's suit against the trust. The list shows captions only, not claims or outcomes. In the Embed actions, over West Realm Shires' $236.8 million purchase of Embed Financial Technologies in September 2022, the court dismissed the actual-fraud counts in October 2024 and let the constructive-fraud counts proceed; the later outcome is not in the record. ^{4 5}

analysisIn November 2024 the debtors sought approval of a settlement with Sam Trabucco, co-chief executive of Alameda Research Ltd. with Caroline Ellison from August 2021 to August 2022, whom they found to have received about $40 million of potentially avoidable transfers besides about $20 million of cash compensation: he would hand over two San Francisco apartments bought for $8.7 million, a yacht bought for $2.51 million, paid by an Alameda wire after he moved 2.51 million USDC from his FTX.com account to Alameda, and his claims, including a $69.2 million FTX.com customer claim. The retained records do not show whether the court approved it. The FTX Group also filed a claim in Silvergate Capital's own bankruptcy, describing Silvergate as one of its banks from 2018 until the collapse; the outcome is not recorded. ^{6 7}

analysisOn 8 November 2024 FTX Trading Ltd., Island Bay Ventures and Clifton Bay Investments (formerly Alameda Research Ventures) sued SkyBridge Capital II, its general partner and coin fund, SALT Venture Group, Anthony Scaramucci and Brett Messing (Adv. Pro. No. 24-50209) to avoid three 2022 transactions which, according to the complaint, were: a sponsorship deal under which FTX agreed to pay SALT $12 million and FTX Trading paid $2 million; a $10 million investment in the SkyBridge Coin Fund funded through Alameda Research Ltd. from a Silvergate account that had just received customer deposits; and the purchase in September 2022 of 30% of SkyBridge Capital II and its general partner for $45 million, also funded by Alameda Research Ltd., with an option over a further 55% for $137.5 million. The complaint says Bankman-Fried caused debtor funds to be spent on each, and that SkyBridge sold the FTT and SRM it received for about $3 million against the debtors' wishes, in breach of its LLC agreement, before filing $45 million claims against many debtors; SALT claimed $8 million against FTX Trading. The debtors seek disallowance of those claims and damages from Scaramucci and Messing. ^{1 2}

analysisThe complaint also alleges that Scaramucci helped Bankman-Fried look for new equity after the purchase, introducing him in late October 2022 to the crown prince of Saudi Arabia, which produced an offer for Saudi state funds to invest up to $250 million in FTX, and arranging a meeting with the President of the United Arab Emirates; that on 9 November 2022 Messing proposed a release, already signed by Scaramucci, under which Island Bay would give up its stake without any return of capital, to which no one at FTX replied; and that SkyBridge II's December 2023 balance sheet showed only $28 million of assets when the crypto bought with FTX money should have been worth at least $60 million. These are the debtors' allegations; the retained records contain no answer by the defendants and no ruling. ^{1 2}

analysisEmergent Fidelity Technologies Ltd, an Antigua company owned 90% by Bankman-Fried and 10% by Wang with Bankman-Fried as sole director, was formed to hold shares in Robinhood Markets; the two borrowed about $546 million from Alameda Research to fund it, and it held about 56 million Robinhood shares, 7.6% of the class. A creditor sought a receivership in Antigua on 17 November 2022, and the High Court appointed Angela Barkhouse and Toni Shukla of Quantuma as joint provisional liquidators. Around 6 January 2023 U.S. prosecutors seized about 55 million Robinhood shares and $20.7 million in cash held for Emergent in New York in connection with Bankman-Fried's prosecution, with competing claims by the debtors, Bankman-Fried, Emergent and BlockFi. Emergent filed its own Chapter 11 case in February 2023 and was jointly administered with the debtors. Emergent and its liquidators each answered the forfeiture order in the criminal case in June 2024, and the liquidators withdrew their petition in February 2025; the disclosure statement lists about $626 million, the proceeds of the Robinhood shares, among the assets held by the Department of Justice, which the debtors were working with on distribution to victims. ^{1 2 3 4 5}

analysisOn 7 October 2024 the debtors announced that the court had confirmed their plan: 98% of creditors by number would receive about 119% of their allowed claims within 60 days of the effective date, subject to know-your-customer and other requirements, and the debtors projected $14.7 billion to $16.5 billion of distributable value, including assets controlled by FTX Digital Markets' liquidators, FTX Australia's administrators, the U.S. Department of Justice and cooperating private parties. These are the debtors' projections at confirmation. Intercompany claims designated for cancellation (Class 9) are cancelled, released or settled without any distribution. The plan took effect on 3 January 2025, when the FTX Recovery Trust was established; on 4 June 2025 the trust moved for a final decree closing the cases of the consolidated debtors and separate subsidiaries while keeping FTX Trading's lead case open, and the retained proposed decree does not show when it was entered. A further appeal in the case was filed in the District Court on 14 September 2026; the retained docket summary does not name the appellant or the order appealed. ^{1 2 3 4 5}