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FTX Group Resumes Salary Payments but There’s a Catch: Report

FTX Payroll will start remunerating employees for their work again, with certain exceptions for former staff members in two regions.

It’s been nearly three weeks since FTX first froze withdrawals on the 11th of November and initiated bankruptcy proceedings.

However, clients and creditors of the battered exchange have not been the only ones left paying for Sam Bankman-Fried’s mistakes out of their own pocket.

3 Weeks of Uncertainty

According to attorneys involved in the ongoing bankruptcy case, FTX was run as a “personal fiefdom,” with many assets going unaccounted for. Presumably, the attorneys were unaware of the funds missing from employees’ wallets. The personnel in question continued working despite suffering an interruption in their scheduled payments.

It will be interesting to see if this interruption will be the cause of any future litigation between FTX employees and the now-bankrupt firm. Although it’s possible the contracts that the employees signed allowed for periods of delayed payment due to “extraordinary circumstances,” they may feel they still have a shot at winning against the disgraced former exchange in court.

No Payouts for Bahamian and Aussie Employees Yet

The return to scheduled payments of salaries was announced yesterday evening by John Ray III, FTX’s new CEO.

“I am pleased that the FTX group is resuming ordinary course cash payments of salaries and benefits to our remaining employees around the world. FTX also is making cash payments to selected non-U.S. vendors and service providers where necessary to preserve business operations (…).

We recognize the hardship imposed by the temporary interruption in these payments and thank all of our valuable employees and partners for their support.”

It’s unclear from this statement what will happen to the money owed to non-U.S. vendors in non-business critical roles. Furthermore, this announcement does not apply to employees of FTX Digital Markets – FTX’s Bahamian subsidiary – and FTX Australia, who are not protected by the provisions of chapter 11 bankruptcy and are involved in separate bankruptcy procedures in their respective jurisdictions.

Furthermore, the salaries of certain current and former executives will not be resumed, which is an understandable move considering their responsibility for the fiasco.

However, as previously mentioned, this could also leave FTX open to future litigation from the excluded executives. Among those being passed up for regular payments are SBF and Alameda Research’s Caroline Ellison, as well as co-founder Gary Wang and Director of Engineering Nishad Singh.

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