Since FTX filed for bankruptcy, investors and traders are counting their losses and seeking avenues to reduce the impact. However, the staff and contractors of the crypto exchange have been left unattended.
It is, therefore, a sigh of relief to hear that FTX plans to resume paying its staff and contractors. The new CEO, John Ray III, announced a plan to help about 101 companies affiliated with the company before filing for bankruptcy.
On 19 November, FTX debtors approached the Delaware bankruptcy court. They filed a motion for the exchange to pay (them) prepetition compensation and commensurate benefits.
Ten days after, John Ray III announced that the exchange has about 101 affiliated companies. He said these affiliated companies are the company's debtors consisting of the staff and contractors. Therefore, there is a need to settle them since the exchange collapsed.
Shortly after the court's approval, the CEO announced the payment details. He said,
FTX is resuming ordinary cash payments of salaries and benefits to our remaining employees worldwide."
The company tweeted that the exchange will resume ordinary course payments of employees and foreign contractors.
Furthermore, Ray revealed that the exchange makes cash payments to selected non-US vendors and service providers. These sets of beneficiaries would be paid to preserve business operations. Similarly, the payment will be subject to the limits approved by the court.
Interestingly, the exchange announced that it would not pay some of its staff. They include the former CEO, Sam Bankman-Fried, Gary Wang, Nishad Singh, and Caroline Ellison.
Experts say the announcement signifies that employees and contractors will receive their outstanding pay. The pay was suspended when the company filed for bankruptcy on 11 November.
The CEO acknowledged the resilience of the employees and contractors amidst the hardship that the collapse caused. He, therefore, thanked them for their support.
However, there are exceptions to the payment. That is, when the company resumes the payment, it will not extend to all subsidiaries and related companies.
According to the announcement, the exchange revealed that some employees of the exchange would not receive payments. One of those categories of people is the employees of FTX Digital markets in the Bahamas. The reason for their exemption is that they are subject to a separate liquidation proceeding in the Bahamas.
Interestingly, the company's headquarter is in the Bahamas, and the employees cum contractors will receive the relief.
Similarly, Australia-based employees of the exchange (domiciled in Australia) and the FTX Express will not be paid. These employees will not get paid because they are subject to separate proceedings in Australia.
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