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November 30, 2022

Legal News

November 30, 2022

FTX’S Collapse And Its Employees

Approximately 300 employees were impacted earlier this week when the crypto exchange FTX imploded. Many high-level executives tendered their resignations as news of financial impropriety at the firm became public with the expectation that the remaining employees have or will be losing their jobs.

Unfortunately for many of these employees, not only are they out of work, but many have had their savings wiped out. FTX issued equity in the form of its own tokens as part of its compensation. A year ago, FTX also provided an opportunity for employees to purchase FTX’s token at a discounted rate of 50% of what venture capitalists had paid during the last fund-raising round – which tokens are now worthless.

While it is not unusual for companies to offer equity as part of their compensation package, employees in the crypto industry will (or should) now question the true “value” of their equity in light of FTX’s collapse as part of any offer they are contemplating accepting.

If you are an employer that is considering accepting a position that pays part of your compensation in equity (crypto or otherwise), the attorneys at Outside Legal Counsel LLP can help.

This is not legal advice and is attorney advertising.

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